asia pulp and paper (APP) is a Jakarta, Indonesia-based pulp and paper company. It was established in 1972 as Tjiwi Kimia by Eka Tjipta Widjaja, making it one of the world’s largest pulp and paper companies. Asia Pulp & Paper is a Sinar Mas Group subsidiary officially established in 1994 when Sinar merged Tjiwi Kimia and PT Indah Kiat Pulp & Paper paper and pulp operations.
Brief about a paper company
In December 1976, CV Berkat, an Indonesian company, Chung Hwa Pulp Corporation, and Yuen Foong Yu Paper Manufacturing Company joined forces to form Indah Kiat. Sinar Mas acquired sixty-seven percent of the venture’s shares. Since 1990, Tjiwi Kimia has been listed on the Jakarta and Surabaya Stock Exchanges. Paper mills like Ningbo Zhonghua, Gold East Paper, Ningbo Asia, Gold Huasheng, Gold Hongye, Hainan Jinhai Pulp and Paper, and Guangxi Jingui Pulp & Paper were established in China by Tjiwi Kimia in 1992.
How did it go public?
Sinar Mas merged Tjiwi Kimia and PT Indah Kiat Pulp & Paper pulp and paper operations in Indonesia when it incorporated Asia Pulp & Paper in Singapore in 1994. It went public on the New York Stock Exchange the following year. To establish itself as a market leader in paper and pulp, it began making capital investments in 1996 and 1997, investing $4.7 billion. Its annual paper and packaging production exceeded four million metric tons by 1999.
How has it become famous?
The company eventually spun off APP China through a debt-for-equity swap and relocated its headquarters back to Indonesia. It agreed to cover the debts of its subsidiaries in Indonesia by repaying $7 billion in debt over the next ten years. Indah Kiat, Lontar Papyrus, Pindo Deli, Tjiwi Kimia, and Akamas Fortuna were just a few of Asia Pulp & Paper Indonesia’s paper mill operations in 2010. Its primary operations were in China and Indonesia, producing 6.4 million tons of paper annually and 13 million tonnes in Indonesia. The same year, it hired Patrick Moore, a former Greenpeace activist who wrote a report claiming that APP was not responsible for Indonesia’s deforestation.
It has signed agreements with non-governmental organizations to monitor its sustainability practices. Greenpeace, Rainforest Action Network, and other NGOs expressed cautious optimism after the company announced its zero-deforestation plan. Greenpeace also agreed to halt its global campaign against APP and open discussions to ensure the company correctly implements its policy. This agreement was terminated in 2018 because APP was “not genuinely serious” about ending deforestation.
In the Kampar peninsula of Sumatra, APP continues construction and logging. The APP Forest Conservation Policy, which it adopted in February 2013, outlined its commitment to enhancing forest conservation.
However, APP also planned or carried out several significant expansions to increase production capacity from 2013 to the present. Partners from the APP expressed concern that the commitments outlined in the Forest Conservation Policy would not be met because overcapacity has been linked to adverse effects on the social and environmental environment.