Bintang Agung was one of Sutrawan’s joint-ventures in partnership with the Gao Group. They were the owners of a pulp mill built in Perawang, Riau province, in lowland central Sumatra. It was just over one year since the mill had begun production with a capacity of 100,000 tons a year; small for a modern pulp mill. Danny Lau confided to Ennis that an expansion was about to be launched that would bring the production up to 300,000 tons a year.
‘After that we shall continue with our program, to raise Bintang Agung’s pulp production to one million tons!’ he said with pride and satisfaction. Lau had what could only be described as a megalomaniac vision of the future; everything he talked about was big.
Their mill expansion program would place a high demand on the company’s wood supply organisations. They were creating large plantations; they called them timber estates, which were necessary for the development of the company’s raw material resources. Bintang Agung had started their tree plantation program five years previously, however, were struggling as a result of their lack of knowledge and experience, forcing them to extend their wood harvesting by clear-cutting into their concessions of natural forest.
The object of the pulp wood plantation project, was to guaranty the long term supply of raw material to their mill, to replace mixed tropical hardwoods from their logged over forest concessions, by establishing fast growing hardwood plantations of acacia and eucalyptus providing a renewable wood fibre resource.
The company had established five thousand hectares of plantations and they planned to plant eight thousand each year. They had been established on old forestland that had been transformed into scrub and grassland, their intention was that the plantations would be progressively extended to zones created by shifting cultivation and logged over sites.
Kalevi Nurminen’s forestry specialists advised them on soil improvement, computerised forestry mapping, genetic selection and plantation management.
Lau explained they were also developing a tree nursery with a planned capacity to produce enough tree seedlings necessary to provide harvestable trees after twelve years. The nurseries would when they reached full capacity supply plantations programmes of about twenty thousand hectares a year. The total plantation programme when completed would cover 180,000 thousand hectares.
It was unprecedented in South East Asia, but Lau said the creation of renewable forestry resources was vital for the development of Indonesia’s forestry industries and conservation in the long term. Bintang with Nurminen’s specialists had forecast that acacia mangium could turn out to be the eucalyptus of Asia.
The program represented another two thousand square kilometres of rainforest replaced by vast monocultures whose effect on the regional ecology was unknown and very unpredictable, land that could never again be regenerated as rainforest.
Hardwood trees that had taken two hundred years to reach maturity, irreplaceable giants, were felled for the production of low-grade plywood and throw-a-way chopsticks, for hygiene conscious Japan. The remaining forest would then be clear-cut for pulpwood. For the simply reason that wood was cheap and readily available, given away in the form of almost free government concessions with negligible labour costs and no social responsibilities for the workers.
There existed barelands where fast growing tree plantations could be developed, but that required real investment and in the meantime the unique rainforests were being mined in the same manner as non-replaceable mineral resources.
The lack of a home based industry and capital to create one, forced the Indonesia to import paper products from Scandinavia and the North America. It was in the interest of the industrialists of those countries to maintain the status quo, as long as they had sufficient of wood resources from their native forests to supply their own mills and export the products of those mills overseas, thus amortising their existing investments.
Companies such as Atlantic Forestry Industries and Kentucky River Pulp of the USA had obtained vast forestry concessions, against the promises to build paper mills and other wood processing plants, in remote provinces of Indonesia. They exploited the rich forests, natural deposits of timber, extracting the high-grade wood, without little intention of fulfilling their part of the bargain, until finally the Indonesian government withdrew the concessions.
Sutrawan had been the first to build an economically viable paper pulp mill in the country, though over the years smaller plants had been set up, such as that built by the Japanese in Martarpura. His mills were not large by western standards, but his partner being the prudent Taiwanese led by Gao, preferred to advance slowly in their first steps into Indonesia. When Ennis met Deny Lau for the first time, the mill had just started production and Bintang Agung had only relatively recently begun looking seriously at the question of forestry resources over the long term, with the intention of setting up plantations.
Their mill needed to harvest enough wood to produce one hundred thousand tons of pulp annually. That was about four hundred thousand cubic meters of mixed tropical hardwood a year, or almost million small trees, equal to the deforestation of over ten square kilometres of natural forest every year. That area would then be planted with new trees. Gao had explained that it was considerably less than that lost to shifting cultivation - and it would be constantly regenerated by new planting.
Trees that produced the best pulp, for strong papers, were conifers. They were rare in tropical regions of South East Asia. The only conifers, which were indigenous to Borneo, were agathis and dacrydium.
The agathis was a magnificent tree of up to sixty meters in height one and a half metres in diameter for matures specimens. The foliage was concentrated at the crown of the tree, leaving a long straight bole free of branches, making it easy work for chain saws. The wood was too valuable for paper pulp and was reserved for veneer and furniture industries at a price of over 250 dollars a cubic meter.
The dacrydium was of the same family that people commonly called monkey pines, which decorated many a garden in Europe. It was a much smaller than the agathis and grew on sandy subsoils, they grew in groves and could be harvested at a reasonably economical cost.
What was not known was exactly where the dacrydium grew and what volume of standing wood was available for exploitation. There were no maps, neither was there any experience for calculating its harvesting costs.
It was crucial for the viability of the Barito project, that the existing dacrydium stands were sufficient in quantity to be capable of supplying the mill for the initial twelve to fifteen years of its existence, the time necessary for the plantations to reach maturity. The plantations could then take over as the source of raw materials after the natural forest resources had been depleted.
At that time, the only pulpwood cut in Indonesia was that which Sutrawan extracted in Sumatra for his own mill or exported to Taiwan. This wood was termed as mixed tropical hardwood, which was to say a heterogeneous mixture of the trees that coexisted in the luxuriant tropical forest, several hundreds of different species.
The wood was considered low quality, as a consequence of constantly varying mixture of tree species, and more generally the poor paper making characteristics of its fibres. Long fibre pulp was essential for making most kinds of paper; it gave paper strength, even if its proportion in the mix was as low as ten percent. To produce it locally, would have required plantations, needing years of experimentation, and twelve or more years of growth, until the trees reached maturity and were ready for harvesting.
Such plantations had been started in Java, on the only land that had been available, poor hilly terrain nearby the town of Cijulang. The results were good but the wood was too expensive for pulp making because of the high cost of harvesting over a difficult terrain.
An investor, who controlled forestry concessions with a standing stock of natural long fibre wood species, count on revenues worth a total hundreds of millions of dollar, enough to pay comfortable pensions to a legion of politicians and industrialists. The tragedy was that the sole objective of
many of those investors, who controlled the exploitation of the forest, was to provide for their own comfort and retirement plans, ignoring the question of future responsibility by continuing blindly in their plans as many had done before them.
If the investors succeeded in one way or another, to get their millions out before the rainforests were transformed into disastrous barelands, they would be laughing all the way to their offshore banks.
They certainly did not risk going to jail, or floating belly up in Jakarta’s vast seaport of Tanjung Priok, as did their infinitely poorer compatriots...when their sins caught up on them.
AN OVERBEARING FRIEND
Borneo Pulp Page 17
