PT Kiani Kertas Pulp Mill Project -...

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United Fiber System Ltd

PT Kiani KertasPulp Mill Project

Operations Management Agreement

July 28, 2005


Mill location

PT KK - Location

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PT KK Pulp Mill Project

Capacity : 1,500 adt/d BHKPLocation : East KalimantanIn Operation : since Nov 1999Raw Materials : Domestic & OverseasCurrent Conditions : Discontinuous operation due

to lack of working capitalConstruction by : Consortium of,

1. HA Simons, Canada 2. Beloit, USA 3. Ahlstrom, Finland



Other facilities include:Housing Complex for EmployeesSeveral Jetties for both outgoing pulp & incoming materials (2 x 15,000 DWT)

Wood supplyFuel Oil

AirportMedical CenterSchoolsSports & Recreation

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OMA is a interim measure before final Acquisition

UFS to operate & manage the Mill

Monthly pulp production: at least 30,000 t

Sales Price : USD 500 per tonne

(approx. Industry average)

Manufacturing Costs: USD 220 – 300 per tonne

(approx. Industry average)



Acquisition process takes 3 – 5months

Final price to determined after due diligence

Definitely much lower than a new mill

PT MBBM is USD 863m (without Chemical and Water

Effluent Treatment plants)

Advantages of time + immediate earnings

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Bark production

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PT MAL Wood Chip Mill

Project

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Wood Chip Mill Project

Capacity: 700,000 tonnes/yearProject duration: 12 monthsInvestment cost: USD 45 millionFinancing: CMEC & RZBMarket price : USD 120 per tonne (approx. Industry average)Manufacturing Costs: USD 65 per tonne (approx Industry average)Raw material supply: neighbouring plantations



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Key Messages

Excellent Business opportunity

Immediate returns

Reflected in second half results

UFS on track with

Wood Chip Mill

Operation of Kiani Kertas Mill

PT Kiani Kertas Pulp Mill Project -...

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