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The rapid expansion market of paper products linked to deforestation in Indonesia into the European is supporting the further expansion of pulp plantations into Indonesia’s last tropical forests and peatlands. EEPN is promoting a European-wide campaign to stop the expansion of such  products into the European market and to protect Indonesia’s rainforests and forest communities rights. Read more...

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Friday, 07 June 2013 05:57

Raja Garuda Mas Group

Asia Pacific Resources International Limited (APRIL) started forestry activities in 2993 and commercial pulp production in 1998. Since then, its paper production has grown at the costs of Indonesian rainforests. APRIL exports some pulp to be manufactured into paper by other companies. It also controls its own paper manufacturing subsidiary, Riau Andalan Kertas. This company is based in Riau and in 1998 its paper mill was integrated into the same site as Riau Andalan Paper & Pulp (RAPP, also known as “Riaupulp”). In 2011 APRIL described its mill in Riau "the biggest mill on the planet", with a production of "3.5 million tons of pulp and paper", with a production of “3.5 million tons of pulp and paper”.

 

APRIL is part of the the Raja Garuda Mas Group (RGM), a large Indonesian conglomerate, controlled by Sukanto Tanoto and his family. Tanoto was born in Medan (north Sumatra) in 1949, but his father was a Chinese immigrant who changed his name from Tan Kang Ho. Sukanto Tanoto in 1967 took over his family business of importing car parts. At first, Tanoto tried to diversify his business interest by becoming a contract partner of the state-owned oil company Petramina. The real start for his sprawling business empire came in 1972, when he established the lumber company CV Karya Pelita followed in 1974 by the plywood company PT Raja Garuda Mas ("The Golden King Garuda" in Indonesian).
Based on the huge profits made in the forestry industry and his good connections with the Indonesian ruling elite, Tanoto’s business activities expanded rapidly until the financial crisis of 1997/98. At that time, the Raja Garuda Mas Group was active in the following lines of business:

  • agribusiness: coffee, cocoa, coconut, fishery, oil palm plantation, rubber, shrimp breeding
  • industry: steel products, beverages, cellulose acetate resin chemical, pulp & paper, rayon fibre,
  • latex, foods, video tape recorders and others
  • forestry: wood processing industry
  • finance: insurance, banking, multi finance, securities, leasing, money changing
  • trading: general trading & export and imports, retail
  • mining: coal mining
  • property: real estate, office buildings
  • services: advertising, construction.

The Raja Garuda Mas Group was involved in a default whose coasts were paid by Indonesian people. Its bank, called Unibank, in the 90ties lent hundreds of millions of dollars of its customers money to RGM companies. These companies were unable to pay many of these loans and in October 2000 Unibank was put under the control of the Indonesian Bank Restructuring Agency (IBRA). Despite efforts to revive the bank, it was closed down at the end of October 2001 by the Bank of Indonesia, the Indonesian central bank. Unibank’s closure left IBRA with the obligation to pay back US$230 million to the customers of the bank. The IBRA has tried to hold Sukanto Tanoto responsible for the loans, but by 1999 Tanoto had already sold his shareholdings in the bank to a number of new owners.

Last modified on Friday, 07 June 2013 06:22

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