Tjiwi Kimia director Suhendra Wiriadinata said recently that the plant, located in Ogan Komering Ilir, South Sumatra, would produce short-fiber pulp to support Tjiwi Kimia'€™s business, as 85 percent of its paper was derived from short-fiber pulp.

'€œWe import long-fiber pulp,'€ he said, adding that currently Tjiwi Kimia was supplied short-fiber pulp from its sister company PT Indah Kiat Pulp and Paper Tbk. Short-fiber pulp is a major raw material, while long-fiber pulp is added to strengthen paper composition.

Oki Pulp plant investment'€™s value was US$2.64 billion, he said, adding that around 70 percent of it, or around $1.8 billion, would be funded by a loan from the China Development Bank (CDB). The remaining 30 percent was from the three Oki Pulp shareholders, including Tjiwi Kimia, according to kontan.co.id. As one of the shareholders, Tjiwi Kimia would add capital injection up to $407 million by 2016, he added.

To raise capital, Tjiwi Kimia would also issue new shares with pre-emptive rights. Tjiwi Kimia would release 1,335 billion ordinary shares, with an offering price of Rp 1,000 (0.08 US cent) per share, so Tjiwi Kimia would pocket around Rp 1.335 trillion.

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