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  Boxboard 350,000 late 1996
Lontar - Jambi PM#1 BHK pulp drier 135,000 late 1996
Pindo Deli - Karawang PM#8 	 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