Indonesia Prepares Growing Pulp Capacity, Increases Timber Supply

 

ANARTA News, Jakarta, Indonesia, reported this past week  that the nation's government said it is optimistic the country would achieve its paper pulp production target of 8.7 million metric tpy in 2017. 

The country will have additional production from two new pulp plants to be operational in 2017, Director of Plantation and Forest Produce Industry at the Industry Ministry Panggah Susanto said. Two new integrated pulp plants - in South Sumatra and Riau - will come on stream in 2017 with production capacity of 2 million metric tpy, Panggah said. 

"Through efficiency and breakthrough in the downstream sector we are confident the target could be achieved," he said here on Tuesday.

He said the prospects are still good for paper pulp industry as the worlds demand for pulp grew 2.1% annually on an average. In addition, there are not many producing countries still having room for expansion like Indonesia. 

"The opportunity (for expansion) is open only in Indonesia and a number of countries in Latin America," he said. 

President Director of PT Riau Andalan Pulp and Paper (RAPP) Tony Wenas said that Indonesia is a potential player in the pulp and paper industry in the world as it has a number of comparative advantages other countries do not have. In Indonesia, it takes only four years for acacia and eucalyptus trees to be ready for harvest. In other rival countries, sub-tropical countries, harvest would come every 40-50 years.

"Indonesia also has geographical advantage of being closer to growing markets," Tony said. 

He explained that the opportunity is wide open for Indonesia to break into the ranks of three largest pulp producers among nine producing countries in the world. According to the report, the government of Indonesia has allocated 10 million hectares of land to be grown with industrial timber, adding so far only 4 million hectares of the land have been utilized. 

"If the 10 million hectares of land are fully utilized , it would not be difficult for Indonesia to break into the ranks of three largest producers in the world," he said. 

He said with support from the government, expansion of the pulp industry could contribute significantly to the country's economic development. In addition to increasing export earning, the expansion of industry would open more jobs. There is also a belief that the pulp industry has a potential multiplier effect. A cited example has been where a pulp factory could provide 7,000 new jobs directly and also create an astounding 90,000 jobs indirectly. 

Tony said his company has exported paper products, PaperOne, to 75 countries and the number is expected to increase to 85 countries this year. He said his company is seeking market expansion in the E.U., although its marketing focus remains in the Asia Pacific region, including China and Australia.

 

According to a similar report by the Tempo news reporting service of Jakarta published yesterday (March 2), the Industry Ministry of Indonesia now considers that the continuous change in the constellation of global pulp and paper industry could be beneficial to the country.