Study :

INDONESIAN PULP AND PAPER INDUSTRY PROGRESS, 2010

(After facing Global Crisis)
April, 2010

After going through global economy crisis, Indonesian pulp and paper industry rises again,
encouraged by the world’s pulp price that begins increasing. For example, in November 2009, the
pulp price skyrocketed to US$ 710 per ton. The price increase is estimated to continue until 2010. In
fact, the pulp price once fell to the lowest point at the level of US$490 per ton.

Before global economy crisis, Indonesian pulp and paper export was prone to increasing, in line
with the high demand for paper product use in the home country and overseas. Paper export until
2008 was recorded increasing by about 5.1% per annum, whereas export of the raw materials
thereof (pulp), was stagnant at the range of 2.4 million ton. The high export performance was
caused by more competitiveness of Indonesian pulp and paper industry than products of other
countries, especially from developed countries such as United States of America and Canada.

The need for pulp and paper in this period was reflected from the increasing production capacity.
During 2004 – 2008 period, domestic pulp capacity increased by 0.6% per annum on the average,
namely from 5.2 million ton to 6.4 million ton per annum. In 2009, the installed capacity thereof
increased again to 6,9 million ton per annum, in line with new factory operation. In the same
period, paper production capacity went through significant increase as well, from 10 million ton to
10.9 million ton per annum.

Meanwhile, Indonesian pulp and paper productivity still faced constraints in raw materials,
because supply from Industrial Forest (HTI) has not fully replaced raw materials from natural
forest. The Government gave opportunity to pulp factories to complete their supply from
Industrial Forest not later than in 2009. With this deadline, pulp factories were expected to be
capable of continuously fulfilling raw materials demand from their Industrial Forest.

This study book prepared by PT Media Data Riset consisting of 350 pages also explain about
performance aspect of each company, such as competition level and business map and strategy of
large company (Group). The role of supporting industry thereof is also discussed, like machine
and spare parts industry, and availability factor of power energy, infrastructure, waste treatment
of pulp and paper industry, and so forth. In addition, it is completed with regulations on pulp and
paper business. Therefore, this study is very beneficial for decision makers from pulp and paper
producers, banking sector, suppliers, investors, capital market circles, and other relevant business
sectors.

This comprehensive study book is offered at the price of Rp 5,000,000 (Five million rupiah) per
copy for the Indonesian version or US$ 750 (Seven hundred and fifty US Dollar) per copy for the
English version. The interested applicant could directly contact PT Media Data Riset Jakarta
through telephone number (021) 809 6071, 809 3140, facsimile (021) 809 6071, or e-mail to
mediadata.co.id. The order form is attached to this proposal letter. For overseas or outside Jakarta
order, additional delivery fee would be charged.

Jakarta, April 2010

PT Media Data Riset

Drh. H. Daddy Kusdriana M.Si.

President Director
 LIST OF CONTENT
INDONESIAN PULP AND PAPER INDUSTRY PROGRESS, 2010
(After facing Global Crisis)
April, 2010
1. INTRODUCTION
1.1. Background
1.2. Coverage and Purpose of Study
1.3. Data and Information Source
2. POPULATION AND GENERAL
DESCRIPTION OF INDONESIAN
ECONOMY
2.1. Population of Indonesia
2.1.1. National population growth rate
2.1.2. Population growth by province
2.1.3. Composition of population by age
group
2.1.4. Projection of Indonesian
population growth
2.2. General Description of Indonesian
Economy
2.2.1. 2009 economic growth exceeds
the target
2.2.2. Inflation rate of 2010 is 5.7%
2.2.3. Income per capita of Indonesia
2.2.4. Rupiah exchange rate
2.2.5. Foreign exchange reserve
2.2.6. Current transaction balance sheet
2.3. 2010 Economic Rate is Projected 5.5%
2.3.1. 2010 APBN (State Budget and
Revenue) is affected
2.3.2. Increasing Rp 21.9 trillion
2.3.3. Revision opportunity
3. PULP INDUSTRY DEVELOPMENT
3.1. Description
3.2. Types of Pulp
3.3. Pulp Production Process
3.4. Loss Level in Production Process
3.5. Pulp Production Capacity
3.5.1. The Largest Domestic Investment
3.5.2. Integrated
3.5.3. Sumatera is the largest
3.6. Factories and their capacities
3.7. Controlled by Large Groups
3.7.1. Sinar Mas Group is the largest
3.7.2. Raja Garuda Mas Group
3.7.3. Barito Pacifik dan Citra Agratama
Group
3.7.4. Kalimanis Group
3.7.5. State-owned Company Group
3.8. Production Development
3.8.1. Pulp production increases by 1.6%
per year
3.8.2. Production by company
3.9. Demand for Pulp Increases again
3.9.1. Price reaches the highest point
3.10.60% of raw materials is supplied from
Industrial Forest (HTI)
3.11. Risks encountered by pulp industry
3.11.1. Price fluctuation
3.11.2. Competition
3.11.3. Change of interest rate and
exchange rate of foreign currency
3.11.4. Environmental factor
3.11.5. Scarcity of raw materials
3.11.6. Natural disaster
3.12. Use of Nonstandard Raw Materials
3.13. Investment Interest
4. RAW MATERIALS FOR PULP
4.1. Sources of Raw Materials for Pulp
4.1.1. Main log for pulp raw materials
4.1.2. Logging waste
4.1.3. Smallholders’ Forest
4.1.4. Log for Pulp Industry
4.2. Government Regulations Plan 2010
4.3. Riau Natural Forest is logged
4.4. The Opportunity of Smallholders’ Forest
(HTR)
4.5. Forest Area is narrowing
4.6. Soft Landing threatens wood raw
materials
4.6.1. Land Clearing: A Shortcut to get
Logs
4.7. Industrial Forest (HTI) Project
4.7.1. Potentials of HTI development
areas
4.7.2. Issuing the permit of HTI of 7.8
hectare
4.7.3. HTI-Pulp becomes the mainstay
4.7.4. Non priority HTI-Pulp
4.7.5. Dominated by big business group
4.7.6. Raw material supply for Sinar Mas
Group
4.7.7. PT KBRI develops HTI
4.7.8. HTI Investors invested Rp 33
quintillion
4.7.9. Business permit will be revoked
4.8. High Capital and High Risk
4.9. 4 Plantation Government Owned
Companies (BUMN) develop HTI
4.10. Investors’ worries
5. WASTE PAPER RAW MATERIAL
5.1. Waste paper production increases by 5.5%
each year
5.2. Waste Paper Import
5.2.1. Import is still quite high
5.2.2. Import by type
5.2.3. Import by country of origin
5.3. Export Development
5.3.1. Waste paper export is insignificant
5.3.2. Export by type
5.3.3. Export by country of destination
5.4. Consumption
6. PAPER INDUSTRY
6.1. Types of Paper
6.1.1. Industrial Paper
6.1.2. Cultural Paper
6.1.3. Cigarette paper
6.1.4. Tissue/household paper
6.1.5. Other paper
6.2. Paper Manufacturing Process
6.3. Total Plants and Capacity Thereof
6.3.1. Capacity increases 1.7%
6.3.2. Total paper plants by location
6.4. Production capacity by type
6.4.1. Industrial paper capacity
6.4.2. Cultural paper
6.4.3. Tissue Paper
6.4.4. Cigarette Paper
6.4.5. Types of Other Paper
6.5. Paper Business Is Controlled by Big
Groups
6.5.1. Sinar Mas Group
6.5.2. Raja Garuda Mas Group
6.5.3. Garama Group
6.5.4. Indhasana Group
6.5.5. Kalimanis Group
6.5.6. State-Owned Company
6.6. National Paper Production
6.6.1. Production increases 0.9% per
annum
6.6.2. Paper production by type
6.6.3. Industrial paper production
6.6.4. Cultural paper industry
6.6.5. Cigarette paper production is
stagnant
6.6.6. Tissue production increases 6.6%
6.6.7. Other paper production
6.7. Dumping Charge
6.7.1. The United States of America
imposes BMI
6.7.2. Benefit Import Duty
6.7.3. Philippine Safeguard Action
6.7.4. Gulf countries threat
6.7.5. Exportation to Korea is pressed
6.7.6. Review
6.8. Investment
6.8.1. Japan’s Interest Is High
6.9. Producers complain about Regional
Regulations
7. EXPORT-IMPORT DEVELOPMENT
7.1. Pulp Export Drops
7.2. Pulp Export by Type
7.2.1. The largest chemical wood pulp
soda
7.2.2. China remains the largest
7.3. Paper Export
7.3.1. Gaining foreign exchange of US$
3.7 billion
7.3.2. Paper export by type
7.3.3. Export by country of destination
7.4. Import Development
7.4.1. Absorbing foreign exchange of
US$ 958.9 million
7.4.2. Chemical wood pulp dissolving is
the largest
7.4.3. Canada is the main market
7.5. Paper Import
7.5.1. Import increases by 15.8%
7.5.2. Kraft Linier Moves Sack Kraft
7.5.3. China is the main supplier
8. MARKET SIZE AND DOMESTIC
CONSUMPTION
8.1. Pulp
8.2. National Paper Consumption
8.3. Paper Consumption by Type
8.3.1. Industrial paper
8.3.2. Cultural paper consumption
8.3.3. Cigarette paper consumption
8.3.4. Tissue Paper
8.3.5. Other papers consumption
8.4. Paper Consumption per capita
9. THE WORLD’S PULP AND PAPER
INDUSTRY
9.1. The World’s Pulp Production Capacity
9.1.1. The largest product is wood pulp
for paper & paperboard
9.1.2. Indonesia is number 12
9.2. The world’s paper production capacity
9.2.1. The world’s paper production
9.2.2. The world’s writing and
printing paper production
9.3. The world’s pulp price
9.3.1. The world’s paper price
10. INFRASTRUCTURES AND FACILITIES OF
PULP AND PAPER INDUSTRY
10.1. Condition of Factory Machines and
Instruments
10.2. Technology and Machine Application
10.3. Dependence on Imported Machines is
still High
10.4. Imported Machines should be reduced
10.5. Need for Power Energy Source
10.5.1. Power need is supplied by PLN
10.5.2. Cause of power energy supply
crisis
10.5.3. Electricity condition in Sumatera
10.5.4. Power deficit in Sumatera needs
Rp 3.7 trillion
10.5.5. Estimated condition of Java –
Bali system condition 2008
10.6. Human Resources
10.7. Cost Aspect
10.7.1. Classified into capital intensive
industry
10.7.2. Capital market fund is quite
desired
10.8. Issues
11. INDUSTRIAL WASTE TREATMENT
11.1. Type of Pulp and Paper Industry Waste
11.2. Government Regulation on Pulp and
Paper Industry Waste Treatment
11.2.1. Analysis on Environmental
Impacts (AMDAL)
11.2.2. Emission standard
11.3. Waste Treatment in Pulp and Paper
Industry
11.3.1. PT Indah Kiat Pulp & Paper
11.3.2. PT Toba Pulp Lestari
11.3.3. PT Pindo Deli
11.3.4. PT Lontar Papyrus
11.3.5. PT Suparma
11.3.6. PT Surabaya Agung
11.3.7. PT KBRI
11.3.8. PT Fajar Surya Wisesa
11.4. Chemical Substance for Pulp and
Paper Industrial Waste Treatment
12. MARKETING ASPECT
12.1. Distribution channel
12.2. Domestic Production Distribution
Channel
12.3. Pulp and Paper Distribution Channel
12.4. Competition
13. GOVERNMENT’S POLICY ON PULP AND
PAPER INDUSTRY, AND FORESTRY
13.1. Investment Sector
13.2. Investment Facility
13.2.1. Fiscal facility
13.2.2. Imported goods and materials
contained in the master list
13.2.3. Granting of tax holiday facility
is expanded
13.3. Presidential Decree on One-Roof
Investment
13.4. Approval of Investment Permit
13.4.1. Approval letter
13.4.2. Expansion permit
13.4.3. Amendment approval letter
13.5. Application of the Decree of the
President on One-Roof Investmen
13.5.1. One-Roof Investment
Presidential Decree is profitable
for certain regions only
***
13.5.2. Mechanism of one-roof service
system
13.6. Formation of National Team for Export
and Investment Increase
13.7. Government’s Policy on Forestry Sector
13.7.1. Forestry layout is arranged
again
13.7.2. Forest-plants Concession Right
is increased to 35 years
13.7.3. Timber Use Permit for Peat Soil
Development area is stopped
13.7.4. Reforestation Fund
13.7.5. 50% of IPK (Timber Use Permit)
wood must be used for domestic
consumption
13.8. Forestry investment permit is assigned
to BKPM
13.9. Policy on Industrial Sector
13.9.1. Industrial Operation Permit
13.9.2. Licensing procedure
simplification
13.9.3. Pulp and paper product quality
standard
13.10. Policy on Trading Sector
13.10.1. Facility for the purpose of
increasing export
13.10.2. Simplification of regulations
on export
13.10.3. Organization of harbor
14. CONCLUSION AND PROSPECTS
14.1. Conclusion
14.1.1. Supply-demand and export
aspect
14.1.2. Every year a paper factory
needs to be built
14.1.3. Superiorities of Indonesian
pulp and paper industry
14.1.4. Constraints faced
14.2. Pulp and Paper Business Opportunity
is still Fine
14.2.1. Government’s guidelines for
pulp investment
14.3. Prospect
14.4. Pulp and Paper Export Potential
DIRECTORY : PULP AND PAPER PRODUCER
IN INDONESIA
 ORDER FORM
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Phone : (021) 809 6071, 809 3140,
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Study :
INDONESIAN PULP AND PAPER INDUSTRY PROGRESS, 2010
(After facing Global Crisis)
April, 2010

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