The World’s Fourth-Largest Paper Producer

by | Nov 10, 2020 | Market Research | 0 comments

The industry of pulp and paper has significantly contributed to the nation’s economy. In fact, Indonesia ranked in the top ten world’s largest pulp and paper producers, with 16 million tons of production capacity (IDN Financial, 2019). In 2019, the country’s Central Bureau of Statistics (BPS) recorded that the pulp and paper contributed 3.95% to the non-oil and gas industry, with 8.14% growth.    

As per June 2019, the Indonesian export of pulp and paper products was reported at 438.294 kg mn (CEIC, 2019). Several big countries in the Asia region are the main markets for Indonesia’s pulp and paper export. The countries include China, South Korea, India, Saudi Arabia, and Japan. Indonesia exported pulp amounted to 3,75 million tons valued at USD 1,85 billion, while the export of paper was 4,26 million tons, valued at USD 3,76 billion. 

An Ever-Growing Market

Indonesia offers growing opportunities for the pulp and paper industry. Although the massive digitization has slowed down the demand for writing and printing paper, there is still a strong demand for other paper products. 

Paper Packaging. The demand for paper packaging in Indonesia is growing, specifically due to the shift in consumer behavior. Moreover, various governmental regulations encourage the use of recyclable products, which indirectly increase the demand for paper packaging. Paper and paperboard packages are significantly used as a packaging for multiple products, namely food, healthcare and personal care products. The demand is forecasted to register a CAGR of approximately 4.6% during the 2020-2025 period (Mordor Intelligence, 2019). The demand is also driven by the rising e-commerce sector in the country, especially during this current pandemic situation. 

Tissue Paper. The demand for tissue paper is projected to grow steadily, due to the limited substitute product. The tissue paper industry is expected to grow 5% annually (Pefindo, 2018). 

Cigarette Paper. The Indonesian cigarette market is valued at USD 25,156 million in 2020 (Statista, 2020). Simultaneously, the demand for cigarette paper is also growing. Domestic manufacturers used to be able to supply the demand for it. However, due to the closing of one of the cigarette paper factories, the import of cigarette paper rocketed this year, by almost 43% (APKI, 2020).    

Market Challenges

Although Indonesia is one of the biggest paper and pulp producers in the world, the country is still facing many challenges. One of the current challenges is the accusation of dumping by Australia and America, and then several export destinations charge Indonesia an anti-dumping import duty. On the other hand, the dumping practice by China for the paper that is imported to Indonesia leads to an oversupply, and therefore, the paper industry lost its market in its own country.  

The industry is also still dependent on imports for some parts of the manufacturing sector. CEIC recorded in June 2019 that the import of paper-mill, pulp-mill machinery, and paper cutting machine reached 1.865 kg mn (CEIC, 2019). The Indonesian Pulp and Paper Association (APKI) has also stated that the raw materials for pulp and paper production thin out, making 50% of the raw materials imported (, 2020).   

Two Paper Producers Giant Based in Indonesia

As recorded in the Ministry of Industry, currently Indonesia has 84 operating manufacturers of pulp and paper. As the third-largest pulp producers and fourth-largest paper producers in the Asia region, Indonesia is home to two leading pulp and paper manufacturer companies. These two world-leading paper producers are also dominating the international market. 

Asia Pulp and Paper (APP). Headquartered in Jakarta, the company was founded in 1972, APP offers a wide range of pulp and paper end-products such as tissue, packaging, and writing paper. The company owns several pulp and paper factories in Indonesia. Currently, APP is dominating the paper industry in Indonesia, with a production capacity of 12 million tons per year. The company’s products are being distributed to a total of 120 countries on 6 continents.    

Asia Pacific Resources International Limited (APRIL). The APRIL is a part of RGE Group, founded by Sukanto Tanoto in 1973.  Their main factory is located in Pangkalan Kerinci, Riau Province, and the total production capacity is 2,8 million tons per year. With a current asset of USD 20 billion, APRIL group contributed 6.9% to the local economy in Riau province.  

Other than the two, there are many paper manufacturers such as Pura Group, that have exported 60% of their total 18.000 tons production capacity to a total of 50 countries and FajarPaper, one of the biggest paper packaging manufacturers with 1,3 million mt per year.

The pulp and paper industry is indirectly affected by the massive digitization and paperless trends. Moreover in this pandemic, where the digitization is accelerated, sustainability and innovation become more important than ever. However, here are several key takeaways on how the industry had and could survive in the future: 

  • Asian Pulp and Paper (APP) set out policies for sustainable and responsible practices. With growing awareness of the environmental impact, APP balanced their economic model with a responsible action for the environment, especially lands and forests. The company has also been developing and expanding its market reach to Central Asia.    
  • PT. Indah Kiat Pulp & Paper has a wide range of paper products. However, they are focusing on a paper that is mainly used for industrial purposes, such as container boards, paper for food packaging, and specialty colored papers. These products have significantly contributed to the company’s sales (JakartaGlobe, 2017).  
  • McKinsey Papers & Forest product company, for example. When they experienced a decrease in graphic paper sales, they focused on selling more non-graphic products such as tissue paper and paper packaging. Due to the paperless trends and global warming issues, innovation became really important. Maintaining the supply chain and addressing social responsibility and sustainability issues can help the industry survive and develop (Pranata, 2019).   

According to Indonesia’s Industry Development Plan, pulp and paper are one of the industries in Indonesia that are being prioritized for its development. The industry has a huge growth opportunity. Especially, supported by the soil and rain condition in the country that is appropriate for the development of Hutan Tanam Industri (Industrial Plantation Forest). 

BRIGHT Indonesia as a Partner to Help Your Company Join Indonesia Paper Industry 

Indonesia pulp and paper production has the potential to outperform other countries. The increase in production capacity is expected to be able to fulfill domestic demands and export.  However, with all the opportunities,  to enter Indonesia’s paper industry it is crucial to have the right local partner.

BRIGHT Indonesia is a perfect partner for your company. BRIGHT Indonesia will assist on the ground, including virtual assistant during the mission, logistic arrangement, and communication of every detail. It can make your company focus on developing partnership cooperation without thinking further about the hassle during their business trip.

BRIGHT Indonesia provides several services such as Market Insight Research, Business Partnership Engagement, and  Business Registration and Establishment services that can help you in expanding and developing your business, register and establish your products and company, as well as obtain the work and stay permit in Indonesia ((expatriates utilization plan (RPTKA), expatriates utilization permit (IMTA), limited stay permit (KITAS) easier. 

BRIGHT Indonesia always strives to give excellent services designed only to fulfill your company’s needs with experiences in assisting multiple global clients in entering Indonesia and Southeast Asia Market. Having successfully collaborated with several clients, BRIGHT Indonesia has an extraordinary experience with global companies. These collaborations are proof of our unrivaled service. For more information, email



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