The new plant will have an annual production capacity of 3.9 million tonnes of industrial paper, adding to Indah Kiat's current capacity of 2.2 million tonnes, the company said in a stock exchange filing late on Wednesday.

Rising demand for industrial paper has pushed the company's production to near full capacity, it said.

"To anticipate rising demand for company's products, especially for industrial paper, the company plans to increase the production capacity," the filing said.

As of 2022, the company also has annual production capacity for 3.1 million tonnes of pulp, 1.6 million tonnes of cultural paper, which is made of fresh wood fibre, and 108,000 tonnes tissue paper.

It would seek shareholders approval in a meeting next month due to the large size of the investment.

(Reporting by Fransiska Nangoy; Editing by Kanupriya Kapoor)