US$2.3 Billion Paperboard Factory, APRIL's Biggest Investment in History

TheIndonesia.id - Minister of Industry Agus Gumiwang Kartasasmita appreciated the expansion of the sustainable fiber, pulp, and paper industry, Asia Pacific Resources International Limited (APRIL Group) by expanding its product portfolio to establish a sustainable paperboard production facility worth IDR 33.4 trillion or US$ 2.3 billion.

"Increasing paperboard production in Indonesia will reduce our dependence on imports for this product, as well as increase the country's foreign exchange reserves through exports," said the Minister of Industry in a statement in Jakarta, Tuesday, March 29, 2022.

The Minister of Industry conveyed this during a review of the realization of investment in sustainable packaging products, in Pangkalan Kerinci, Riau Province, accompanying the Coordinating Minister for the Economy Airlangga Hartarto. Agus said this development was also in line with the Government's efforts to substitute imports and strengthen industrial and manufacturing development throughout Indonesia.

The new facility construction located in Pangkalan Kerinci, Riau, is one of the largest manufacturing investments in Sumatra in the last 10 years. This investment is expected to support the pace of development and economic recovery in Indonesia after the COVID-19 pandemic through the diversification of downstream products that are sustainable and have high added value.

Sihol Aritonang, President Director of PT Riau Andalan Pulp and Paper, APRIL Group's business unit, said that the investment was a new stage in APRIL's business development in Riau, as well as reflecting the company's commitment to continue its long-term investment in Riau Province. “This is APRIL's biggest investment since its founding almost 30 years ago. This product diversification strengthens our commitment to developing the business sustainably in line with the company's sustainability commitment and APRIL 2030 vision," said Aritonang.

According to him, the facility will also have a significant multiplier effect in the form of creating job opportunities for more than 4,000 workers in the construction phase and absorbing up to 1,000 new jobs once fully operational.

In November 2020 APRIL launched its APRIL 2030 commitment which aims to have a positive impact on the climate, nature, and society while continuing to grow into a company that always pays attention to sustainability aspects in the next decade.

According to Aritonang, the new investment comes in line with global efforts to reduce the use of plastic, polyester, and fossil-based materials. Demand for recyclable and biodegradable products, from packaging to fashion, is driven by consumer preferences for e-retail or online purchases, especially in high-growth markets such as China, Indonesia, India, and Vietnam.

Global demand for self-packaged paper products is expected to increase 3 percent this year, driven by increased food production along with population growth and lifestyle changes that involve individual packaging and food delivery. "APRIL guarantees the supply of fiber raw materials 100 percent from renewable industrial forest plantations (HTI). The additional supply will come entirely from the existing supply chain," said Aritonang.

The diversification of value-added downstream products is in line with APRIL's policy on sustainable forest management or SFMP (Sustainable Forest Management Policy) 2.0, including no deforestation. The investment will directly contribute to the achievement of APRIL's 2030 commitments, including zero net emissions from land use, zero net loss from conservation areas, positive biodiversity gains, and eradication of extreme poverty in communities around operational areas.