New RAPP Program Works to Minimize Forest Fires

PT Riau Andalan Pulp & Paper, or RAPP, has initiated a new fire management program in the Pelalawan Regency of Riau Province, in cooperation with local government agencies that manage forest lands, enforce environmental protections, and deliver disaster response. RAPP selected four villages to participate in a pilot program to curb forest and land fires. Through this “Fire Care Village” program, a village that managed to avoid fires completely from July to September would be awarded a special bonus of 100 million Indonesian rupiah in assistance, the equivalent of more than $8,000 USD. Villages in which fires affected less than 1 hectare of land, and in which residents controlled the blaze within 24 hours, would receive 50 million rupiah.

RAPP, a subsidiary of APRIL (Asia Pacific Resources International Limited), is among the constituent companies of the RGE Group, the $15 billion corporation established by Indonesian entrepreneur Sukanto Tanoto. As such, RAPP takes its responsibilities as a corporate citizen seriously. Following Mr. Tanoto’s business philosophy based on keeping the needs of company, community, and the planet equally in mind, the APRIL concessions in Riau practice a zero-burn policy and strive to maintain compliance with all applicable regulations and environmental best practices. Innovating to find new ways of crisis management (in this way is forest fire) is also part of the important criteria of a successful entrepreneur.

RAPP’s Fire Care Village program came in response to extensive forest and land fires that occurred in Riau in the spring of 2014. The situation became so dire that the Indonesian government declared a state of emergency. RAPP executives noted local village residents might need added incentives to take an active role in fire management.

Forest Fire Management

International environmental organizations viewed the spring fires with concern. One group listed more than 3,000 verified fire alerts on Sumatra for the period from late February to mid-March. June through September is typically Indonesia’s dry season, and the country saw very few fires during the early spring of 2013. The spring 2014 figures are far higher than those during a June 2013 fire and haze crisis on the island. Experts believe that unusual drought conditions in Sumatra in the early part of 2014 contributed to the problem, with the majority of the fires occurring in Riau.

Environmental organizations admit difficulties in gathering accurate data on exactly which concession boundaries any particular fire has affected. The situation is a complex one, and the solutions will require better communication between government agencies and companies, as well as better monitoring systems on the ground. RAPP continues to look for ways to take a leading role in fighting this shared problem.

Wood Pulp Industry Working to Develop Sustainable Practices

APRIL, one of the world’s largest pulp, paper, and fiber manufacturing companies, operates as part of the RGE Group, which is based in Indonesia and directed by entrepreneur and philanthropist Sukanto Tanoto. Sustainability is a crucial determining factor to the success of a company. In order to have a lasting business model, one needs to think of how to best develop sustainable practices.

Through working closely with a variety of interested parties, including a Stakeholder Advisory Committee composed of a team of independent experts, APRIL adheres to the highest possible standards of environmental stewardship as it monitors the fire-prevention, sustainability, and social issues associated with its operations. The company maintains more than 200,000 hectares of protected conservation forestland on Sumatra near its wood and pulp processing mill. Its Wood Purchase Policy assists in guarding against illegal logging operations through a tracking system and a chain of international certifications.

APRIL Plantation
APRIL Plantation

APRIL, and the wood pulp and paper industry in general, have increased their focus on sustainable practices over the last few years. Aware of the impact of any business that makes extensive use of natural resources, corporations like APRIL have begun to rely more and more on transparency and dialogue with local community groups in the regions in which they do business. With the developing world’s increasing demand for products such as timber and wood pulp, the issue of sustainability has evolved into one that affects the entire world. China, which has a burgeoning export trade in wood and paper products, is comparable to many other rapidly developing nations in its recent focus on implementing comprehensive reforestation programs in order to keep pace with usage.

Thanks to increasing government involvement and interest in promoting the industry, Indonesia has become a key player in the international wood pulp products market. The country had already reached a spot among the top 10 nations in the field a decade ago. With APRIL and similar companies taking more comprehensive looks at long-term strategies that make good sense both economically and environmentally, sustainability may now be a more achievable goal.

Sukanto Tanoto – Sustainable Entrepreneurship for the 21st Century

Sustainable Palm Oil

Sukanto Tanoto, who directs the work of multiple companies under the $15 billion corporate umbrella of the RGE Group, is an Indonesian-born entrepreneur who worked his way to success through his determined efforts and dedication to constant education and self-improvement. Mr. Tanoto continues to emphasize these values throughout his businesses and the philanthropic work of the Tanoto Foundation, which aims to provide educational assistance and to empower workers, students, and others in Indonesia, Singapore, China, and beyond Southeast Asia. In addition, he maintains a strong focus on the long-term sustainability of his companies and the communities in which they do business.

 

Sustainable Palm Oil

Sukanto Tanoto believes that environmental sustainability and a focus on the needs of all stakeholders are essential to long-term profitability and good corporate citizenship. His company Asian Agri, which is based in Indonesia, maintains facilities in three locations on Sumatra, partnering with local smallholder farmers to manage some 60,000 hectares of palm oil plantation land. One of the country’s largest such operations, Asian Agri, works to harvest its palm oil product in a manner that supports the conservation of the environment and empowers local farmers, as well as other considerations of the greater social welfare.

Under Sukanto Tanoto’s leadership, Asian Agri has delivered numerous economic, social, and educational benefits to its nearly 30,000 partner smallholder families. In addition, Mr. Tanoto has worked directly with Amanah, a smallholder palm farmer group, assisting members in earning certification in sustainability practices. In 2013, due to his support, Amanah became the first organization of Indonesian smallholders to receive such certification.

Recently, in an effort to encourage sustainable palm production among farmers, Asian Agri shared premiums or extra proceeds from exports totaling $220,000 with the representatives of Village Unit Cooperatives (KUD) in the Jambi and Riau provinces. The products produced through these farming methods have been well-received in the international markets.

Freddy Wijaya, general manager of Asian Agri, said that farmers have been encouraged to plant sustainable palm not only for the opportunity to obtain premiums, but also to achieve long-term sustainability.

European countries tend to favor sustainable palm oil because the production process does not cause environmental damage. Farmers have found more market certainty in Europe, where they have a wider margin and can cover greater production costs.

International authorities, writing in peer-reviewed journals, have described this type of sustainability entrepreneurship as providing responsible stewardship of resources, as well as long-term opportunities for worker advancement, in addition to the traditional entrepreneurial emphasis on profits. A concentration on sustainability also tends to drive companies in the positive direction of increased innovation in products, processes, and services.

Sateri – Award-Winning Supplier of Cellulose-Based Materials

As an entrepreneur, Sukanto Tanoto is always looking for ways to expand the business. One of the bold movements he took was to list Sateri on Hong Kong Stock Exchange. After calculating the risk, he went ahead to enter the market and without losing his focus along the way, Sateri is now a well recognised company, receiving awards for its success.

In 2014, Sukanto Tanoto’s RGE Group company Sateri Holdings Limited, a major international producer of cellulose products with manufacturing and production facilities in Brazil and China, received its third Asian Excellence Recognition Award in a row. The award, presented by the continent-spanning publication Corporate Governance Asia as part of its effort to encourage superior business practices throughout the region, highlighted Sateri’s record of success in corporate governance and investor relationships. Under the direction of RGE Group CEO and founder Sukanto Tanoto, Sateri works to maintain high-quality and environmentally sustainable business practices in every aspect of the company’s operations.

 

sateri_logo

Headquartered in Shanghai and Hong Kong, Sateri produces a variety of grades of highly pure, dissolving wood-pulp products, as well as viscose staple fiber, for an increasingly demanding market. The company’s Brazil-based upstream operation, located on 150,000 hectares of land farmed by freeholders, consists of a plantation sustaining renewable eucalyptus growth, as well as a wood-pulp mill. In China, Sateri’s downstream production facility processes dissolving wood pulp into viscose staple fiber.

Sateri wood pulp and viscose products are frequently used in nail polish, lip gloss, shaving cream, high-performing automobile tires, baby wipes and other personal care and sanitary products, and a variety of textiles. Sateri viscose adds body to cosmetics, color and quality to fabrics, and stability to heavy-use products. In addition, Sateri products create thicker ice cream without adding unwanted extra calories, and thicken paints while keeping them easy to brush on surfaces.

Being a socially responsible entrepreneur, Sateri and Sukanto Tanoto demonstrate their ongoing commitment to the environment by adhering to all relevant local and regional official regulations and striving for the highest possible quality in corporate social responsibility. For example, Sateri’s Brazil-based mill incorporates cutting-edge design standards and includes a chemical recovery operation that recycles as much as 95 percent of all chemicals utilized in the manufacturing process. The company’s Chinese and Brazilian facilities have received ISO 14001 certification for environmental management.

Jusuf Kalla’s Statements during Tanoto Entrepreneurship Series 2013 Part 1

Jusuf Kalla attended the Tanoto Entrepreneurship Series on 30 April 2013 at University of Indonesia. Tanoto Entrepreneurship Series is a joint effort by Tanoto Foundation and University of Indonesia to prove that young people in Indonesia have the capabilities and potential to be a successful entrepreneur. Tanoto Foundation was founded by Sukanto Tanoto, an entrepeneur from Indonesia, Medan. His son, Anderson Tanoto was present at the event together with Jusuf Kalla.

Jusuf Kalla and Anderson Tanoto at Tanoto Entrepreneurship Series 2013
Jusuf Kalla and Anderson Tanoto at Tanoto Entrepreneurship Series 2013

More than just a hindsight, statements made by Jusuf Kalla during the event has many strong relevance to the current leadership that he holds, as a Vice-President of the world’s 10th largest economy by share of world GDP in 2011. Details can be found here.

On Entrepreneurship, Jusuf Kalla mentioned that even though the government manages, provides the facilities, and develops the infrastructure, entrepreneurs are the ones who build the country. Without entrepreneurs, the country will not run. This is in line with Sukanto Tanoto’s belief in running his business – it is important not to rely on special privileges from the government and use it as your main success factor. A business has to own a strong competitive advantage in order to outlast and outrun competitions in the long run.

Jusuf Kalla also mentioned that Entrepreneurship is an attitude that requires adjustments to a particular situation. Similar to Nike’s slogan, it is about ‘Just Do It’, because more often than not, when we think too much, it is not going to happen. JK’s emphasis on “Just do it”, flexibility and result orientation is aligned with RGE’s “Think, Act, Learn” and “Achieve results through systems”. Sukanto Tanoto believes that these 3 principles are the basic foundation of building a strong enterprise.
Lastly, JK mentioned that entrepreneurship is a combination of several key characteristics; one of the most important ones is to be logical. However, that does not mean that formal education is not important. As emphasized by Tanoto Foundation’s active involvement in the education sector, Sukanto Tanoto and all business under RGE are strong advocates of education.
With these understandings in mind, we can see that Jusuf Kalla knows the Importance of entrepreneurship as the foundation of the country’s economy and he knows that there needs to be a practical and tangible support provided to build the entrepreneurs landscape in the country through practical experience and education.

The Distinctive Entrepreneurial Style of Anderson Tanoto

The son of distinguished Indonesian business leader Sukanto Tanoto, Anderson Tanoto took responsibility for his own career and secured a position with Bain & Company’s Singapore officer as a consultant at a young age. Since then, he has developed his own unique entrepreneurial style that has allowed him to realize success. A member of the Tanoto Foundation Board of Trustees, Anderson Tanoto maintains a dedication to giving back to the community. Recently, he spoke at a tutorial organized by the Tanoto Foundation in Jakarta to encourage and train new generations of entrepreneurs. During this event, Anderson Tanoto discussed the entrepreneurial style of his father.

At the Tanoto Entrepreneurship Series Event, Anderson Tanoto highlighted three key points for entrepreneurial success. These points are informed by his father’s successes and include lessons that he implemented to make his own achievements.

The first principle of entrepreneurship is survival. Sukanto Tanoto began building his business empire, the Royal Golden Eagle group, at the age of 17, and he persevered with a spirit that taught him never to give up on his dreams. Even in the face of adversity, he believed in himself and continued to move forward, despite setbacks.

andersonThe second principle emphasizes growth. For a company to succeed, it requires a solid infrastructure. Growth depends on a reliable core. Thus, entrepreneurs must focus a great deal of energy on developing systems marked by good governance and sound operational processes. When entrepreneurs pay constant attention to the larger business model, they can ensure that their company grows at a sustainable rate. Growth, of course, also depends on a great product. Entrepreneurs realize the most success when they aim to produce not just a good product or service, but one that is better than any other on the market.

Thirdly, entrepreneurs must constantly look for new opportunities. Once a company has become established and has achieved stability, the entrepreneur can continue development by taking calculated risks. During this stage, entrepreneurs can and will fail, but these failures are excellent learning points. Because of this, entrepreneurs should see failure as a lesson, not a mark of shame.