State forestry firm Perum Perhutani revealed Tuesday it would spend Rp 160 billion (US$17.07 million) on the construction of two gum resin processing plants.
“The plants will be built in West and East Java provinces. We will start construction this year. We expect them to be finished in 2011,” Perhutani president director Upik Rosalina told legislators from the House of Representatives’ Commission VI overseeing trade, industry, investment, small, medium and state enterprises.
“The factories will initially process about 6,000 tons of gum resin [per year] but that capacity will be boosted to 10 million tons in the future.”
The gum resin is made from oil pine resin (OPR) tapped from pine trees. Some of its derivative products include cosmetics, pharmaceuticals, food and paint materials.
Most of Perhutani’s pine plantations are located in West and East Java. The firm has some 250,000 hectares of plantations and produces between 55,000 to 60,000 tons of gum resin per year. Perhutani is planning to increase its plantations to include another 4,000 hectares.
Upik said the majority of the gum resin and turpentine was exported to China and European countries.
“China imports some 20,000 tons of gum resin every year and European countries import about the same amount,” she said.
“We aims to export gum resin derivative products to China to take advantage of the ASEAN-China Free Trade Agreement [ACFTA].
Perhutani processes OPR into gum resin and turpentine. The OPR is usually sold as a raw material at more than $500 per ton. Gum resin is sold at $805 per ton, while turpentine is sold at even higher prices.
In 2008 Perhutani produced 38,510 tons of gum resin and 6,936 tons of turpentine, which contributed Rp 800 billion in sales.
The construction of the processing plants is part of Perhutani’s strategic plan to shift the majority of its income to sales of non-wood products from the current wood products by 2012.
Perhutani also plans to reforest 2 million hectares of community forests in the next five years.
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