Tjiwi Kimia, part of Sinar Mas Group's APP, to invest US$167.2M by June for pulp and tissue mill under Oki Pulp and Paper Mills in South Sumatra; investment is part of plan to spend US$407M in Oki, which is 35.2% controlled by Tjiwi Kimia, by 2016
January 13, 2014
(Indonesian Government News)
– An Indonesian stationary producer, Pabrik Kertas Tjiwi Kimia will invest $167.2 million on its subsidiary Oki Pulp & Paper Mills by June this year to fund the construction of a pulp and tissue plant in South Sumatra, the Jakarta Globe reported citing the company's financial director, Suhendra Dinata.
He said the company will fund the investment through its internal cash reserves. It is the second round of the firm's long-term plan to infuse a total of $407 million in Oki by 2016, according to Dinata.
"99.9% of shareholders has agreed this action, because they are convinced this will not affect companies finances," the news agency quoted him as saying on Thursday.
Tjiwi Kimia is a unit of Sinar Mas Group and has acquired 35.3% control of Oki in July 2013 in a bid to expand its business in the sector. Pindo Deli Pulp & Paper Mills and Muba Green Indonesia are the other two shareholders of Oki.
Tjiwi Kimia's net income declined by 45% to reach $20 million during the first nine months last year as compared to the same period a year earlier.
Industry Intelligence Editor's Note: PT. Pabrik Kertas Tjiwi Kimia Tbk is a part of Sinar Mas Group's pulp and paper products business unit, Asia Pulp and Paper Co. (APP), according to the company website.