Destruction of Indon port terminal bridge adds to global paper-product disruptions

AN accident near a plant that supplies the key ingredient to make paper is adding to disruptions that have stoked inflation in everything from toilet paper to diapers and cardboard boxes. 

A ship crashed into a bridge near Palembang in Indonesia’s South Sumatra linking a private terminal owned by Asia Pulp & Paper (APP) with its plant, known as OKI, Letchumi Achanah, APP’s head of strategic engagement and advocacy, confirmed after a Bloomberg request. The company is unable to provide details because the matter is still under investigation, Achanah said by email.

The incident destroyed the bridge, 1 of 2 linking the OKI plant and the terminal. The facility, one of the world’s largest, produced 2.6 million tons of pulp last year, according to the company’s annual report.

Exports from OKI are continuing as cargoes can be transferred from one ship to another as was done previously, according to Merrijantij Punguan Pintaria, an industry ministry official. The facility could take 6 months to be repaired but the accident is unlikely to affect Indonesian exports significantly, she said.

After jumping last year, prices for hardwood pulp in China have risen around 40 per cent this year to record levels due to supply disruptions, firm demand and new project delays. The surge has drawn in everyone from Chile’s billionaire Angelini family to Suzano in Brazil and Paracel in Paraguay to build multi-billion dollar plants. BLOOMBERG

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