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

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.]