Paper Factory PT Tjiwi Kimia Tbk (TKIM), pulp and paper producers controlled by Sinarmas Group, prepared a capital expenditure this year around US $ 50 million to US $ 100 million. According to the company directors, the allocation of capital expenditures will be funded by a combination of internal cash and bank loans.
"Up to the first quarter of 2015, capital expenditures of approximately US $ 18.7 million," said Heri Santoso, Director and Corporate Secretary Tjiwi Kimia. He added that capital expenditure will be used to continue expansion. As is known, Tjiwi Kimia will include capital into its subsidiary, PT OKI Pulp and Paper Mills, worth US $ 407.28 million by 2016. The additional capital is used for plant investment OKI Pulp and Paper Mills.
In the past year, the company depositing the capital of about US $ 167.19 million. Currently, the OKI is still conducting business on a commercial basis and still in the process of construction of the plant and its supporting facilities. The total value of OKI new plant projects is planned to reach US $ 2.63 billion with a production capacity of pulp reaches 2 million tons per year. Pulp commercial production is planned in the second quarter of 2016.
Project investment of about US $ 2.63 billion will come from a bank loan of about US $ 1.8 billion and, the remaining amount of US $ 839 million came from capital contribution shareholders. OKI has signed a credit agreement with a loan of US $ 1.8 billion from the China Development Bank Corporation (CDB). The loan will be used to fund the plant project.
Meanwhile, PT Indah Kiat Pulp & Paper Tbk (INKP), pulp and paper producer which is also controlled by Sinarmas Group, plans to build a tissue paper mill in Riau with an investment of US $ 100 million. According to company director, a plant with a production capacity of 430 thousand tons was targeted to be completed in two years.
"The company will build the plant in Riau. Target production is 430 thousand tons. We would get up eight tissue paper machine line. Investment of US $ 100 million already all included plant, "said Suhendra Wiriadinata, Director of Indah Kiat. Suhendra said the company predicts the first machine could start production in June next year. Its production capacity reaches 54 thousand tons. "The target export largely, if local consumption is met, we are searching the market from exports, one of them to China. We expect other machines followed (in) gap of two months, "he said.
The Company assesses that the tissue paper market opportunity is still prospective afterward it is decided to build a new plant. "We saw the number of tissue consumption is increasing in the last two years. The trademark is still under review, the construction just started, "he said. Throughout 2014, the company recorded a net profit of US $ 126.14 million, down 42.9% from the previous year. A decrease in net income was influenced weakening sales by 1% to US $ 2.63 billion in 2014 compared to the previous year's US $ 2.65 billion.
In the paper industry, Sinarmas Group has a subsidiary, PT Asia Pulp and Paper (APP), which sales target in 2012 is US $ 7 billion. The production capacity of pulp and paper Asia Pulp & Paper originated from five paper company subsidiary, PT Indah Kiat Pulp & Paper Tbk, PT Paper Factory Tjiwi Kimia Tbk, PT Pindo Deli Pulp and Paper Mills, PT Lontar Papyrus Pulp & Paper Industries, and PT Ekamas Fortuna. Sinar Mas Group / Asia Pulp & Paper, through its subsidiary PT Indah Kiat Pulp & Paper Tbk and PT Lontar Papyrus, control pulp capacity of 40% and paper capacity of 31.8% nationwide, equivalent of 2.68 million tons.