DtE 32, February 1997
KIANI KERTAS START-UP SOON
Timber tycoon Bob Hasan will soon start pulp production at his PT Kiani
Kertas project in Berau district, East Kalimantan.
According to company president Machnan R. Kamaluddin, the new plant,
which will initially produce around half a million tons of pulp a year,
expects to start production in April this year. Construction started in
September last year and is expected to be finished in March.
The plant is costing US$1.1 billion and occupies a 3,400 hectare site.
The production is almost all destined for export markets, including Japan,
the United States, South Korea, Australia and European countries.
The pulp plant is projected to earn between US$350 million to $400
million in foreign exchange per year and employ around 4,000 people.
PT Kiani Kertas plans to float its shares on the US Nasdaq Stock
Exchange in 1998.
Pulping the rainforest
Raw materials to feed the plant will eventually be supplied by a timber
estate to be developed by a joint venture between another Hasan company, PT
Tanjung Redeb Hutani, and state forestry company, PT Inhtuani I. The 180,000
hectare estate, planted with Acacia Mangium will be 35% financed by PT
Tanjung, and 65% by government reforestation funds.
However, as is typically the case in Indonesia's burgeoning pulp
industry, the pulp plant will be ready for start-up long before the first
plantations trees will be ready for felling (or even before they have been
planted). The PT Tanjung plantation will not be ready until 2001 and so
mixed tropical hardwoods (timber from natural forests) will be used until
then. (Jakarta Post 8/1/97, Suara Pembaruan 13/1/97, ANTARA 15/1/97)
East Kalimantan: paper and pulp production centre
The Kiani Kertas plant is but one of four major projects expected to start
production in East Kalimantan this year. According to provincial forestry
head, Heru Basuki, the four could produce a total of two million tons of
paper a year.
The other plants are PT Adindo in Bulungan district (also owned by Bob
Hasan); PT Sumalindo Lestari Jaya in Sanga-Sanga, and ICTI. They are also
developing pulpwood plantations of 140,00 - 200,00- hectares.
DtE 29/30 August 1996
NEW PROJECTS MEAN MORE STRESS ON NATURAL FORESTS
The rapid development of Indonesia's pulp and paper industry will put yet
more pressure on the country's already severely depleted forests.
At least sixteen new pulp mills are due to start operating in the next
seven years, with a total capacity of 5.45 million tons -- more than
doubling current capacity. This means more felling of natural forests since
the development of industrial timber plantations has not been rapid and
successful enough to cope with the pulp industry's demand.
All the 65 mills now operating in Indonesia still cut trees from natural
forests. The earliest harvest of plantation wood will be next year. After
that, the proportion of wood from plantations is supposed to increase year
by year, relieving the pressure on natural forests. But natural forests are
already in deep crisis and many will not survive the continued depletion
required before plantations come into full production.
According to Hendro Prastowo, deputy executive chairman of APHI, the
Association of Indonesian Forest Concessionaires, there is no need to worry
about a raw material shortage because pulp producers are committed to
developing plantations. But official statistics already show that plantation
development is way below target. Less than 20% of the 4.05 million hectare
area targeted for plantations has been actually planted. Moreover, according
to Finnish company Enso -- a partner in developing the Indonesian pulp
industry -- statistics refer to the area planted rather than the area
effectively established. A report by the company cites an example in Java
where an area of 1.4 million hectares was reported in 1988. A recent
inventory had found only 0.85 million hectares, or around 59% of the
reported areas fit for keeping under the planned regime. (Jakarta Post 15/5/96)
The sixteen new pulp projects are listed below. They include investments
by well-known timber barons such as Bob Hasan (Kiani Kertas), and Pangestu
Prayogo (Tanjung Enim Lestari, Nityasa Prima).
Name location start capacity/year
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PT Adindo Pulp & Paper E.Kalimantan 2003 300,000 t
PT Aspex Paper E.Kalimantan 1998 250,000 t
PT Dharma Trieka Sejahtera E.Kalimantan 2003 300,000 t
Djajanti Group Irian Jaya 2003 300,000 t
PT Fajar Surya Swadaya E.Kalimantan 1998 300,000 t
PT Guhara Lestary Cellulosa Sulawesi 2003 300,000 t
PT Intan Prima Cellulosa Utama Jambi 1998 200,000 t
PT Intim Nusapersada Jambi 1998 150,000 t
PT International Timber Corp. E.Kalimantan 2003 500,000 t
PT Kiani Kertas E.Kalimantan 1997 450,000 t
PT Mayangkara Tanaman Industri E.Kalimantan 2003 300,000 t
PT Nityasa Prima E.Kalimantan 2003 500,000 t
PT Perawang Sukses Perkasa Ind. Riau 2003 350,000 t
PT Sumatera Sinar Plywood Ind. N.Sumatra 2003 500,000 t
PT Takengon Pulp and Paper Aceh 2003 300,000 t
PT Tanjung Enim Lestari P&P S.Sumatra 1997 450,000 t
(Source: Green News ICEL, 31/5/96)
Finnish project in West Kalimantan
Another new project not listed above is one involving Finnish company Enso
Gutzeit (30%), PT Gudang Garam 30% (owned by Probosutedjo, Suharto's
half-brother) and state-owned forestry company, PT Inhutani III (40%). The
project agreement was signed in June 1996 and the joint venture company is
called PT Finnantara Intiga. A 100,000 hectare pulp timber estate is being
developed in West Kalimantan at a cost of US$140 million. 35% of the funds
have been raised from PT Finnantara's own sources. Trials have been underway
since 1994 and thus far 2,000 hectares in Sanggau and Sintang districts have
been planted with acacia mangium. Construction of a US $1 billion mill (the
location is as yet undecided), with an annual capacity of 500,000 m3 is to
start in 1998. (Jakarta Post 15/6/96)
[This project involves the acquisition of lands owned by indigenous Dayak
communities.]
DtE 28, February 1996
WEST KALIMANTAN VILLAGERS ATTACK PULP PROJECT
In West Kalimantan too, indigenous people are struggling to defend their
customary land against commercial interests. Early in 1995 a company called
PT Nityasa Idola started clearing land for a pulpwood plantation on a
120-hectare area belonging to Dayak families in Belimbing village, Sambas
district. The land had been signed over by the government-approved Village
Head and a few others the previous month. This agreement stipulated that the
company should respect the local customs, respect the local people's rights
and efforts, prioritise local people for employment on the project and pay
attention to village needs. A ceremony, led by the Village Head, was then
arranged in which ten villagers received Rp 500,000 (US $250). The
traditional [adat] leader and other villagers were not involved. Soon after,
the villagers were told rudely that they could no longer work on their
fields as the land had been bought by PT Nityasa Idola. The Village Head
threatened to send to jail villagers who trespassed.
Since then, repeated attempts by the villagers to resolve the dispute
through official channels have failed. In November 1995, their anger reached
flashpoint and they burnt down the company's seedling camp.
According to Lembaga Bela Banua Talino (LBBT), an NGO based in the West
Kalimantan provincial capital, Pontianak, this was the third such attack
against timber estate developers in the area in the past couple of years.
More pulp projects
PT Adindo Hutani Lestari, a timber company partly owned by Suharto's
daughter Siti Hediati Prabowo, is developing a timber estate and pulp plant
with a total investment US $893 million in Bulungan, East Kalimantan,
reports the Jakarta Post. Adindo, said a company statement has so far
planted 550 hectares with such fast-growing tree species as acacia and
eucalyptus. The company, started operations early 1995. (Jakarta Post 24/11/95)
The President's eldest daughter, Tutut, is involved in the huge Tanjung
Enim Lestari Pulp & Paper project in South Sumatra along with timber baron
Prayogo Pangestu and private and government Japanese investment. NGOs are
fighting the project on environmental grounds and have accused the project
of forcibly appropriating land from local communities (see DTE 27 for a
full report).
In October the Ministry of Forestry licensed the establishment of a
150,000 hectare timber estate for the pulp industry in Sanggau, West
Kalimantan. The $ 964.9 million project is be a joint venture between the
Bumi Raya Group and state-owned PT Inhutani II. It is the first to be
licensed since the government reopened the timber estate sector to
investors. A decision to close the sector for 'environmental reasons' was
reversed after paper prices soared, in a bid to boost pulp production and
bring down prices. (Jakarta Post 19/10/95)
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Down to Earth
International Campaign for Ecological Justice in Indonesia
Carolyn Marr (dte@gn.apc.org)