Leading producer of pulp and paper APRIL Group recently announced a major investment in its operations in Sumatra. The company will invest IDR33.4 trillion - more than US$2 billion - in the expansion of its production operations, which will include a new sustainable paperboard production facility.
APRIL said one of the key factors behind the investment is rising demand for environmentally friendly packaging products in domestic and international markets. According to APRIL, its new paperboard facility will be capable of producing 1.2 million tons of recyclable and biodegradable packaging paper per year.
The global paperboard packaging market is expected to grow by about 3% in 2022, driven by increased food production linked to population growth and lifestyle changes such as the preference for individual packaging and food deliveries, the company said.
Speaking at a ceremony to inaugurate the first phase of the new APRIL facility, Sihol Aritonang, President Director, PT Riau Andalan Pulp and Paper, the operating arm of APRIL Group, said the investment in the company’s operations in Pangkalan Kerinci, in Riau province, Sumatra, was part of the company’s long term commitment to the region..
“This investment strengthens our commitment to grow our business sustainably, in line with our APRIL2030 sustainability commitments. The new facility will have a significant positive multiplier effect on our surrounding cities and towns, with over 4,000 construction jobs and nearly 1,000 permanent roles planned,” he said.
The construction of the new facility is one of the largest manufacturing investments in Sumatra in the last 10 years. The investment is likely to support Indonesia’s continued economic development following the COVID-19 pandemic through the diversification of sustainable downstream fibre products with added value, said Mr. Aritonang.
Coordinating Minister for Economic Affairs Airlangga Hartarto, who was also at the ceremony, said: “We warmly welcome this investment by APRIL Group, which is in line with downstream product diversification as a government priority, but also supports the realisation of the green economy, which is vital for sustainable development in Indonesia”.
The development comes as the global focus on reducing the use of plastics, polyester and other fossil fuel-based materials increases. Demand for recyclable and biodegradable options for everything from packaging to fashion is being driven by consumer preference via expanding e-retail purchases in high-growth markets such as China, Indonesia, India and Vietnam.
The investment is also aligned with APRIL’s Sustainable Forest Management Policy 2.0 which includes no deforestation. Additional supply for expanded production capacity will come entirely from its existing supply chain and APRIL has no plans to expand its current land concession and plantation footprint, the company said.
APRIL said the continued development of its operations will directly contribute to the achievement of its APRIL2030 commitments, which include net zero emissions from land use, zero net loss of conservation areas, positive biodiversity gains and zero extreme poverty in its communities.