This project stands as a case study in restoring industrial infrastructure in the wake of financial collapse—balancing fiscal responsibility with operational revival, and setting the foundation for sustained regional growth.
— South Sumatra, Indonesia —
resilience. revitalization. precision.
Reviving Industry: Strategic Business Planning and Debt Restructuring for an MDF Mill in South Sumatra
“Restructuring is not merely a financial remedy—it is a strategic reset that unlocks potential buried under complexity.”
— Shaan Stevens, Project Director, GG International
Challenge
In early 2000, PT Megarimba Karyatama, a private forestry-sector company based in Jakarta, Indonesia, found itself at a critical crossroads. Its medium-density fibreboard (MDF) mill project in Inderalaya, South Sumatra, was left incomplete amidst the financial aftershocks of the Asian Economic Crisis. Although significant investments had already been made, financial distress and market uncertainty paralyzed construction and halted further development. The project lacked a feasible completion roadmap, and its burdened loan structure left little room for maneuverability.
Adding to the complexity, all proposed solutions needed to comply with the stringent protocols of the Indonesian Bank Restructuring Agency (IBRA), which was overseeing nationwide efforts to rehabilitate viable enterprises affected by the crisis. Without intervention, the project risked total asset loss, employee displacement, and a significant blow to regional industrial development.
Strategy
GG International fielded a senior team from March to September 2000, led by Project Director Shaan Stevens and supported by senior advisors Angus McPherson and John Third, alongside Groome Forestry Consulting. The multidisciplinary team conducted a full feasibility reassessment of the incomplete mill, including a detailed review of wood supply, logistics, and local and international MDF markets.
Strategically, the project hinged on creating a viable path to completion. The team worked closely with forestry and engineering specialists to determine cost-to-complete scenarios, constructed operational and financial models, and outlined detailed debt restructuring proposals aligned with INDRA protocols.
Key deliverables included:
- Business Planning: Developed a realistic and investor-ready business plan based on achievable market penetration and wood sourcing strategies.
- Financial Modelling: Created scenario-driven financial forecasts underpinned by robust sensitivity analysis.
- Restructuring Instruments: Drafted loan term sheets and restructuring mechanisms attractive to both commercial lenders and regulatory authorities.
- Negotiation Support: Led discussions with suppliers, buyers, and creditors to align commercial interests with a path to mill completion and long-term profitability.
Transformation
The intervention by GG International resulted in a credible, financeable, and strategically sound turnaround plan for PT Megarimba Karyatama’s MDF operations. The newly structured business and debt strategy provided a pathway for capital re-engagement, enabling the client to approach banks and development financiers with a compelling case for completing the mill.
The revitalized business model did not just aim for financial survival—it positioned the Inderalaya mill to become a key industrial hub in South Sumatra. The work set a precedent for successful, cross-sector collaboration under INDRA oversight and demonstrated GG International’s capacity to drive transformation in high-risk environments.