The impact of trade war between the United States (US) and China provides benefits for paper companies such as Indah Kiat Pulp & Paper, Tbk (INKP IJ), post trade war caused the price of pulp or paper pulp higher. Currently, China is the shortage of raw materials for the paper industry and formerly relied on the import of used paper as the main paper making raw material industries from the US and Europe.
For the record, China became one of the largest export market of Indah Kiat Pulp & Paper in Asia. The portion of the company’s exports sales to Asia reached 71% at 1Q2018. On the other hand, the company is also expanding its business line of paper and packaging industry, with plans to build a factory making packaging products to the industry in Karawang, West Java.
Indonesia has the potential of more competitive raw materials than existing manufacturers in China. Although, still need to import raw materials paper from US and Europe, Indonesia still has its own source of raw material for pulp. To take advantage of the shortage of raw materials in China, Indah Kiat Pulp & Paper can sell products cheaper to China or other countries market.