Estonia’s only packaging paper producer Horizon Pulp & Paper (Horizon) has obtained a lucrative order from Indonesia’s PT Semen Padang, signaling a business boost for Easterm Europe’s pulp & paper industry.

PT Semen Padang is a major state-owned Indonesian cement producer and the deal, worth around €1.9m, will see Horizon ship packaging paper to Indonesia in 2010.

It also highlights the increasing confidence in the East Europe pulp & paper industry, with orders emerging from various corners of the world. Gasworld had previously reported how Horizon was seeing increasing demand from Asia, Africa and North America.

Eastern European countries currently enjoy cost advantages for energy, fibre and labour and their local markets are growing, with Russia and the Commonwealth Independent States (CIS) seeing continued, but slower, growth in 2008. It’s an industrial gas growth driver that is also likely to witness growth in the coming years.

As a pre-cursor to the newly announced deal, Horizon hosted a delegation of senior managers of the Indonesian company - who were on annual visit to reputed paper mills in Europe to finalise buying contracts for 2010.

In past PT Semen Padang has always sourced its packaging paper requirement from mills located in Austria, Sweden, and Russia. However, it will now be sourcing its packaging paper needs from Estonia.

“The agreement represents 10% of Horizon’s half year business and this is the first large value transaction between an Indonesian and Estonian company. Horizon hopes that this marks beginning of a long-term relationship, with other customers in Indonesia too,” explained Sunil Marwah, CEO and member of Management Board of Horizon.

After struggling for orders during the last quarter of 2008 and first quarter of 2009, as a result of a severe drop in demand at the hands of the global credit crunch, Horizon has achieved stability in recent months.

Marwah added, “We now have capacity-equalling orders for the last quarter of 2009. Realising early on that demand in Europe would continue to be soft, newer markets are explored aggressively. Horizon’s efforts proved very successful – starting late 2008, orders from far off markets like Korea, Mexico, Kenya and Australia have been obtained while continuing business with our traditional customers.”

The news would appear to affirm the suggestions that industry is slowly recovering from the depths of recession and as a further boost to the industrial gases business, it’s encouraging to see that end-user sectors such as the pulp & paper industry are experiencing increasing demand.