JAKARTA (TheInsiderStories) – One of the world’s largest pulp and paper companies, Asia Pulp & Paper (APP), will invest US$3.5 billion to build a paper mill in the Andra Prakasam region, India, local wire reported. This investment has become the largest foreign direct investment in India in a recent years.
Through this MoU, APP will set up a greenfield in the land on 1,000 hectares and paper manufacturing with a total 5 million ton (MT) pulp, paper, and board. The factory will have a capacity of 5 million per year.
APP have chosen Andhra Pradesh for its proximity to the east coast and expected to make transportation of raw material easier to the proposed company and finished paper products to China, whose market is seeing growing demand for paper and allied products.
Suresh Kilam, executive director of marketing in APP revealed that the company is planning to produce only packaging paper at the proposed project and will have a daily import and export of materials weighing around 30,000 tons. One-fourth of the production is expected to be utilised for the Indian market.
Asia Pulp & Paper is a paper producer company which is the holding company of PT Kertas Tjiwi Kimia Tbk (IDX: TKIM) and PT Indah Kiat Pulp and Paper Tbk (IDX: INKP).
Started in 1972 with Tjiwi Kimia producing caustic soda, now the unit of Sinar Mas Group run operations across Indonesia and China with an annual combined pulp, paper, packaging product and converting capacity of over 19 million tons per annum. Today, APP markets its products in more than 120 countries across six continents.
Last year, Sinar Mas’ other unit PT Purinusa Ekapersada, has set up new corrugated container factory in Bekasi with Japan’ Oji Holdings Corporation. The project need costs around $453.60 million in two years period.
Both companies will set up PT Oji Sinarmas, where Purinusa will hold 45 percent shares in the joint venture company, while Oji to own the majority stakes 55 percent. The plant will produce 5,000 ton of corrugated container per year. The factory its expecting to start the production in January 2020.
While Sinar Mas continues expand their businesses to various sectors to grab the growing market in Indonesia and abroad. The group is a brand of companies, active in six business pillars such as Pulp & Paper, Agri-business & Food, Financial Services, Developer & Real Estate, Communications & Technology and in Energy & Infrastructure.
Sinar Mas founded by Eka Tjipta Widjaja in 1962. He established the company that exported natural products and imported textiles. Since the new order period, Widjaja’s company had never fallen again and is still expanding until now.
One of his sons from another wife, Oei Hong Leong, was listed as one of the richest men in Singapore according to a 2013 Forbes rich list, with $745 million in wealth.