Sinar Mas P&P Divisions Reduce Investment by 70%

 

According to a report this past week by Deal Street Asia (Boat Quay, Singapore), Sinar Mas (Jakarta, Indonesia) subsidiaries PT Indah Kiat Pulp & Paper (Banten, Indonesia) and PT Pabrik Kertas Tjiwi Kimia (Sidoarjo, Indonesia) have announced that they would each allocate $120 million and $30 million, respectively, for capital expenditures this year. The figure represents 70% less than this past year’s realized investment, totaling $406 million in 2015.

Indah Kiat director Kurniawan Yuwono said the company is taking a very cautious approach towards what is being viewed as potential global economic slowdown or at least correction. He also pointed out to Deal Street Asia that the firm had already bought all of the necessary equipment last year. "This year’s capex will be used for taking care of the machineries and production. We want to ensure that we maintain the company’s performance," Yuwono said in Jakarta recently.

 

In 2015, Indah Kiat produced 2.94 million metric tons of pulp and 1.18 million metric tons of paper, while packaging production rose to 1.84 million metric tons from 1.72 million metric tons the year earlier. The company sold 2.02 million metric tons of pulp, 1.1 million metric tons of paper, and 1.66 million metric tons of packaging. About 54% of Indah Kiat’s sales is domestic and the remaining 46% comes from exports.

 

More information about the PT Pabrik Kertas company and mill is available online.