JAKARTA: A group of Malaysian and Indian investors is considering building a 1.3 billion rupiah pulp and paper plant on the Indonesian side of the Borneo island, The Jakarta Post reported, quoting Forestry Minister Malam Sambat Kaban. 

Kaban said the group also proposed to turn 300,000ha of forest into industrial forests for logging in either west or central Kalimantan. 

His office is studying the investment proposal, the minister was quoted as saying. 

He said some German investors were also interested in such a plan but had not filed a proposal. 

The Jakarta Post said that state revenue from the forestry sector more than doubled to 1.41 trillion rupiah in the first-half to June from 591.7 billion rupiah a year ago. 

The state budget targets a full-year revenue of 2.71 trillion rupiah from the sector, it said. 

To this end, the government plans to set aside 414,000ha of forest for logging permits, The Jakarta Post said. 

Efforts to boost forestry output comes as the wood processing industry is complaining about supply scarcity, which is blamed on rampant illegal logging and smuggling activities. 

In April, the forestry ministry said illegal logging is costing Indonesia over 30 trillion rupiah per year. 

Quoting data from the ministry, The Jakarta Post said Indonesia’s remaining forest area cover is 40 million ha, of which 2.6 million is lost to deforestation each year.