Saturday, 25 August 2007

Indonesia Logging Curbs Hit Pulp Industry - Firms

Indonesia Logging Curbs Hit Pulp Industry - Firms

INDONESIA: August 24, 2007

JAKARTA - Police raids targeting illegal loggers in Indonesia are hurting supplies of raw materials to pulp and paper companies, two major forestry companies said on Thursday.

Indonesia had the fastest pace of deforestation in the world between 2000-2005, destroying an area of forest the size of 300 soccer pitches every our, according to Greenpeace.

Since the start of the year, police have tried to catch illegal loggers in areas including forest concessions owned by companies supplying wood to PT Indah Kiat Pulp & Paper and PT Riau Andalan Pulp and Paper in Sumatra island, said Agus Wahyudi, director of PT Sinar Mas Forestry.

Indah Kiat is a subsidiary of Asia Pulp and Paper, part of the Sinar Mas Group, while PT Riau Andalan is a subsidiary of APRIL, owned by RGM International Group.

"The illegal logging operation has stopped completely flows of raw material from our partners. With the current raw material stocks, we can only operate until October," Wahyudi told reporters after executives from APRIL and Asia Pulp and Paper met government officials.

The two companies needed a total of 9 million tonnes of wood per year, Wahyudi said.

He said talks with the forestry ministry had not had any results.

Riau Andalan has the capacity to produce 2 million tonnes of pulp a year and 350,000 tonnes of paper a year, the company said on its Web site.

Indah Kiat Pulp & Paper has a capacity to produce 2 million tonnes of pulp, according to data from Indonesia's Industry Ministry.

Indonesia has 14 pulp mills with total capacity of 6.7 million tonnes and 79 paper factories with total output capacity of 10.36 million tonnes a year.

In 2006, Indonesia produced 6.23 million tonnes of pulp and 8.64 million tonnes of paper.

Environmentalists blame Indonesia's timber groups for illegal logging and the destruction of forests. The pulp and paper groups have denied that they use illegally logged timber.