JAKARTA: The two pulp and paper manufacturers under the control of Sinarmas Group, PT Pabrik Kertas Tjiwi Kimia Tbk and PT Indah Kiat Pulp & Paper Tbk allocated capex budget of US$400 million this year.
Director of Pabrik Kertas Tjiwi Kimia and Indah Kiat Pulp&Paper Suhendra Wiriadinata said the funding for capex was divided for Indah Kiat as much as US$300 million and Tjiwi Kimia of US$100 million.
"Capex is used for paper machine equipment and machinery maintenance. The funding sources are combination between internal cash funds and loans from national banks," he said Tuesday (12/6).
He explained Indah Kiat ‘s capex will be used to purchase new machinery to complete the paper machine (PM) 6 as much as US$250 million and for the maintenance of existing machines as much as US$ 50 million.
Meanwhile, Finance Director of Tjiwi Kimia Arman Sutedja said the investment fund of US$100 million would be used to purchase equipments for PM 13 and US$50 million for maintenance of each paper machinery.
Suhendra said the operation of PM13, paper production volume is expected to rise in a range of 5% - 10% and encourage the same growth for sales volume.
Based on data from the company, paper production volume of Tjiwi Kimia last year recorded at 961,000 tons per year. Referring to the company's paper production target is expected to be in the range of 1.01 million tons per year to 1:06 million tons per year.
Meanwhile, the business performance of Indah Kiat Pulp & Paper is predicted to be stagnant following the absence of additional production capacity. He said PM 6 is targeted to be completed and to start production next year. (T03/TW)