Q: PT Kertas Leces (Persero) is one of the oldest paper mills in Indonesia having been originally established by the Dutch. Given Kertas Leces’ long history, how is the company currently positioning itself within Indonesia’s pulp and paper sector?
A: At the moment we are no longer a key player in the pulp and paper industry in Indonesia as we have only a 5% market share. Therefore, as a small player, we have taken a strategy to be targeted in our approach with a focus on three niche sectors that offer high margins and have less competition. By being smaller we can be more flexible.
We are sticking to targeted production on premium products. In September 2012 we moved into bank notepaper and in the future, we will go into handmade paper. Finally, we will enter into medium liner premium products as currently these are mainly being imported in Indonesia.
Q: What more can you tell us about future areas of involvement for the company?
A: For the future, we see potential in both the international and domestic markets.
Our bank notepaper will be exported to countries such as Japan in the near future and we will cooperate with Japanese investors and the Bank of Japan. This paper can replace plastic laminate as it is environmentally friendly and our paper can be used as fertilizer when recycling.
As I mentioned previously, medium liner premium products are currently being imported into Indonesia but through our own research and innovation, we have had a pilot project to create our own high-quality medium liner. We also carried out our own internal research for manufacturing bank notepaper. The handmade paper will also be introduced soon and this paper can be sold under the brand of being environmentally friendly as well as beneficial for the workers who create it.
Looking forward, we are focused on working with financial institutions and the end-users of our products. We can work with our partners on research to fully understand their product requirements and application of new technology.
Q: The company is already exporting to international markets such as the ASEAN as well as the US and Europe. Which markets do you plan on targeting for the future?
A: America is interesting for our conventional products and of course we will be focused on Japan for our new products. For China, if we can increase our productivity then this would be an interesting market for us to enter.
Q: How is the company positioned towards working with investors and partners looking to enter Indonesia’s paper and pulp sector?
A: We are open to working with investors interested in coming into the sector in Indonesia. We are already doing this and soon we will begin working with Italian investors who are the oldest manufacturers of security paper in Europe for their production in Indonesia.
Both technology and capital are interesting for us when it comes to working with investors. As Kertas Leces is an established player and we have many experts in the paper industry, I believe we are well-positioned for focused, niche products and can be flexible to cater to new areas of the market with potential partners.
Q: What is the vision that you wish to share with new investors and partners?
A: The vision is to stay focused on being environmentally friendly, to provide more added values to our products, and to improve the welfare of our labor as well as stakeholders. The industrial sector must be able to provide a good income to our human resources and to provide them with a stake in the company.
Q: What should potential partners remember about the company and Indonesia as a final message?
A: The general view of state-owned enterprises in Indonesia is not very favorable when compared to private sector players. However, people should remember that there are state-owned enterprises such as Kertas Let’s which are competitive, modern, and open-minded.