Asia Pulp & Paper Company Ltd. (APP) announced today that it is planning to install three new paper machines at three of its mills in Indonesia, to construct a pulp mill in Malaysia and to expand its operations in China by establishing a converting facility in Yushan Town.


PT Indah Kiat Pulp & Paper Corporation and PT Pabrik Kertas Tjiwi Kimia, APP's publicly listed Indonesian subsidiaries, plan to add identical paper machines to produce coated and uncoated freesheet. The annual production capacity of each machine, IKPP PM#3 and Tjiwi Kimia PM#11, is expected to be 425,000 tons and commercial production is targeted for the third quarter of 1998.

PT Pindo Deli Pulp & Paper Mills, an 83.6% owned Indonesian subsidiary of APP, plans to further expand its production capacity of tissue paper by adding a tissue paper machine, Pindo Deli PM#11, at an approximate cost of US$125 million. This will increase the Group's annual production capacity of tissue paper by 70,000 tons and should commence commercial production in the first quarter of 1999.

Borneo Pulp & Paper Sdn Bhd, APP's 60% owned Malaysian subsidiary, plans to construct a pulp mill at Bintulu, Sarawak with a capacity of approximately 750,000 tons per year. The pulp mill project is still subject to certain final Malaysian governmental approvals. Assuming the project goes forward as scheduled, it is expected to commence commercial production in the first half of 1999.

Yalong Paper Products (Kunshan) Co. Ltd., a wholly owned APP subsidiary in China, plans to install stationary converting facilities in Yushan Town, Kunshan City, Jiangsu Province with an annual converting capacity of 100,000 tons. The group estimates that commercial production should begin by mid-1997. APP has acquired land for the site on which the Yalong Paper Mill will be located.

The massive growth in pulp and paper capacity, will result in a massive destruction of rainforests.  Of the 100 million cubic meters of wood estimated to be consumed yearly by Indonesia pulp industry, only 8 million can be provided by timber plantations, while the remaining 92 will be mostly be sourced by clearing up to a million hectares of highly biodiverse rainforest.

Although Indonesia occupies only 1.3% of the world’s land area, it possesses about 10% of the world’s flowering plant species, 12% of all mammal species, 17% of all reptile and amphibian species, and 17% of all bird species. Famous species include the Orangutan, Sumatran tiger, Sumatran rhino and Asian elephant, contributing towards its status as the second richest country for biodiversity in the world. The forests are also home to millions of forest dependent peoples and provide essential ecological services such as water sheds, soil stabilisation and climate control for millions of people in the region. But Indonesia’s forest ecosystems and species are disappearing fast, and more that a half of them was already destroyed.

The low cost of timber supplies was made possible because these companies were given access to natural forests by the Indonesian Government at virtually no cost, because they did not develop their plantation resource and, in some cases, it appears that they have been able to buy substantial volumes of illegal timber. CIFOR and WWF calculates that between 1995 and 1999, Indonesian pulp producers obtained as much as 20 million cubic metres of timber from undocumented sources.

A large part of the forestry concession held by Arara Abadi in Sumatra, is land traditionally belonging to the local Sakai people. Forestry concession held by Borneo Pulp & Paper (BPP) in Sarawak, Malaysia, threaten traditional forests of 20,000 Iban indigenous people, which may be forced off their land.

APP's current expansion projects, including ocation, product, production capacity (tons/year), estimated date of commercial


    Indah Kiat - Perawang PM#8 drier BHK pulp      135,000     end 1996   

    Indah Kiat - Perawang PM#9 pulp  BHK pulp      500,000     mid 1997 

    Indah Kiat - Perawang PM #3      Coated and  uncoated freesheet  425,000    late 1998                            

    Indah Kiat  - Serang PM #2   Corrugating medium  280,000    late 1996               

    Indah Kiat - Serang PM#3  &#4  Boxboard      350,000    late 1996   

    Lontar - Jambi PM#1       BHK pulp drier   135,000    late 1996   

    Pindo Deli  - Karawang  PM#8 &#9      Coated and uncoated freesheet   500,000     mid 1997                         

   Pindo Deli - Karawang PM#11      Tissue         70,000   early 1999   

   Tjiwi Kimia - Mojokerto  Off-machine  Coate freesheet conversion     250,000*   late 1996   

   Tjiwi Kimia - Mojokerto   PM#11     Coated and uncoated freesheet   425,000    late 1998                            

   Purinusa- Bandung Semarang and Medan Converting  Corrugated machines    139,000*    end 1996     


   Ningbo Zhonghua -    PM#2 & #3       Boxboard       350,000   1997 

   Ningbo Yalong  - Kunshan City  Converting Stationary     100,000    mid 1997      machines  conversion


    India Paper  Mill - Pune PM#1  Coated  freesheet   110,000     end 1996    


    Borneo Pulp & Paper - Bintulu PM#1      BHK Pulp       750,000   early 1999 


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