State forest management firm Perhutani will next year develop the nation's first gum resin and turpentine derivatives processing plant to produce raw materials for the cosmetics, pharmaceuticals, food, and paint industries.
"We'll invest Rp 26 billion *US$2.7 million* for the expansion. Hopefully, we'll complete the construction by the middle of next year, and have the plant running at full capacity early in 2011," president director Upik Rosalina Wasrin said Monday.
She said the plant would be built in West Java, where Perhutani has most of its pine plantations.
At full capacity, the plant will be able to process all of the company's production, which is expected to reach 55,000 tons of gum resin and turpentine this year.
The gum resin and turpentine are made from oil pine resin (OPR), which is tapped from pine trees. Most of the OPR products are sold without being processed at more than $500 per ton. Perhutani currently processes some of the OPR into gum resin and turpentine.
The gum resin is sold at a current price of $805 per ton while the turpentine is sold at higher prices.
"By further processing the gum resin and turpentine, we expect to triple our sales from non-wood production," she said, adding that gum resin and turpentine could produce derivatives that are used as raw materials to make cosmetic, pharmaceuticals, food, paint, and ink products.
Rosalina said Perhutani produced 38,510 tons of gum resin and 6,936 tons of turpentine last year, which contributed Rp 800 billion in sales, This was 35 percent of total sales of Rp 2.2 trillion that was mostly from sales of wood products.
In 2007, the company produced 56,298 tons of gum resin and 10,377 tons of turpentine, targets which the company is determined to achieve again this year.
She noted that all of the derivatives production would be exported to the US, but that other potential markets do exist.
"To anticipate the increasing demand in the international market, we'll expand our pine plantation so that we can increase production of OPR to make the gum resin and turpentine," she said.
The total current area of Perhutani's pine plantation is 250,000 hectares, but can be expanded to 400,000 hectares in the near future.
The development of the processing plant was part of the company's strategic plan to shift the majority of its total income by 2012 to sales of non-wood products rather than the current wood products.
Perhutani also plans to develop 2 million hectares of community-based forests during the next five years.
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