Korindo changes its plans for Kalimantan

Posted: 24 August 2006 in Indonesia, Korindo, New pulp mills

Korindo has changed its plans to build a new 130,000 t/yr light weight coated paper mill and a 100,000 t/yr pulp mill. Instead the company plans to build a 200,000 t/yr pulp mill and no paper mill. RISI reports that negotiations with suppliers are ongoing and contracts are expected to be signed in December. Construction is planned to start in January 2007, with completion by early 2009.

According to RISI, Korindo owns 100,000 hectares of forest land in Kalimantan, which is to supply raw material to the proposed pulp mill. The pulp mill will be financed by internal funds and loans.

Back in September 2005, Asia Pulse reported that Korindo was planning to build a 250,000 t/yr pulp mill at a cost of US$450 million. Within five or six years, said Korindo President Lee Won Je, the capacity of the mill would be increased to 500,000 t/yr.

Raw material for the mill is to come from acacia and eucalyptus plantations on Korindo subsidiary PT Korintiga Hutani’s 92,000 hectares concession. Lee said that PT Korintiga Hutani had proposed to the Indonesian Ministry of Forestry an expandsion of the area of plantations by 15,000 hectares. The plantations are to be established in Kota Waringin Baarta and Lamandau in Central Kalimantan.

Korindo has been operating in Indonesia since the early 1970s. The company is involved in a range of business areas including paper, forestry, chemical processing, shipping, trading, financial, real estate and sports shoes. In 1983, Korindo built a recycled paper mill in Bogor. The mill now produces 420,000 t/yr.

Korindo is Indonesia’s fourth largest logging company. It has concessions covering about 700,000 hectares in West Papua. The company’s logging is notorious. In 2004, Greenpeace activists protested at Tilbury docks calling on the UK government to sieze illegal timber supplied by Korindo.

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