How APP Sees the Forest Through the Trees

If you want to see just how complicated a supply chain can be, the operations of Asia Pulp and Paper (APP) on Hainan Island, China, gives an idea of what goes into products that we often take for granted. And considering that APP is also an integral supplier to companies around the world, it is easy to see how one wayward employee or lax oversight can land a company in hot water with its stakeholders, particularly environmentalists. In APP’s case, its business on Hainan -- from tree seedlings to the finished product -- offers a case study on what it takes to evolve into a more responsible and sustainable company.

Trees, obviously, are to APP what wheat, soy or palm oil are to other companies. APP’s managed forests in Indonesia combine to cultivate far more raw material for the company than its current holdings in China. But those forests, concentrated in Hainan, offer a sense of the scale APP has developed as the world continues to demand paper.

APP’s most recent tour for journalists started from Haikou, the province’s capital and home to 2 million people. Skyscrapers and condominium high-rises eventually give way to a lush landscape of palm trees and plantations that grow just about everything from bananas to mangoes to rubber. After a 90-minute drive, we arrived at a site where eucalyptus trees soar when compared to the stalks of a papaya farm just a few hundred yards away.

It is here is where the efforts of APP’s massive forestry team come to fruition. Once APP’s tree seedlings (discussed in a previous article) are planted, employees are then tasked with ensuring that these trees can thrive. Many moving parts ensure that these trees can eventually be turned into the pulp that is the foundation of APP’s business.

For example, the 25 hectares (62 acres) of trees within the “compartment area” we visited had a profile — as do all the groupings of trees that APP and its subcontractors manage. In this case, this varietal of eucalyptus, “DH32-26,” was planted here because it was the optimal tree for the soil, which is acidic and also rich in minerals such as iron. Trees were harvested in this compartment before, evident by the stumps we saw spread across the property. Most of the stumps, which APP employees cut from 3 centimeters above the ground to maximize the trees’ volume of fiber, had three shoots inching upward. Some of those are replanted, while others are taken to labs for analysis.

Other information includes how far apart the trees are spaced, the land’s elevation and the tree’s survival rate (96 percent in this case). The amount of fertilizer, and what proportion of it is organic, is also included. Water is not an issue with Hainan’s abundant rainfall, as APP says that workers plant trees only after the ground is wet enough to plant without having to haul in water. The status of this land, which in this case was a rural collective, is also included in case any questions over compliance fester anytime in the future. All this information is stored in a database so that APP’s forestry division can gauge what varietals of eucalyptus based on the composition, and condition, of the land the company owns, leases or shares with local communities.

Plenty of underbrush sits beneath these trees. As the eucalyptus grow higher, the branches lower on the trunk wither and die as they no longer get sunlight. They eventually break off and join those trees’ leaves and additional underbrush, which become a mulch, keeping pests away. Yellow wildflowers grow everywhere. “We want this underbrush; we want these other plants to grow so that we can grow our business while giving local people economic opportunities,” said one APP spokesperson during this tour.

So is this swath of farmland as rich in biodiversity as it was generations ago, before farming became integral to Hainan’s economy? Probably not, but neither are the lands in North America that were once forests but are now farms. But these lands are also not the severe monoculture typical of soy farms and palm oil plantations. To the untrained eye, this looked like any forest — except the trees are all eucalyptus and planted neatly in rows.

The trees we saw were just a speck of APP’s total holdings. APP representatives explained that one hectare (2.5 hectares) of eucalyptus trees offer 30 tons of fiber upon harvest, assuming these trees reach approximately 30 to 50 meters (98 to 164 feet) before they are felled. In one year, APP’s operations process 30 million tons of fiber. That is a lot of trees. That is a lot of jobs. And that is the kind of statistic that makes many environmentalists squeamish -- and makes APP an easy target.

But according to APP representatives, this is evidence that the company is serious about its zero-deforestation policy. “When we are accused of burning down forests and other lands, we want to say, 'Why would we want to destroy any land at all, or burn down our own trees or those of our neighbors?' It would only hurt our own business,” one APP spokesperson asked.

The larger point in the tension between developed and developing countries simmers over what needs to be done to stall the effects of climate change. Settlers to Europe and North America cut down many forests generations ago. Now, developing countries want to do the same as their people seek the standard of living long the norm in wealthier countries.

Hence, APP points to the jobs it has created: The company employs approximately 100,000 people worldwide. Furthermore, the company insists that its tending of managed forests show that the company is a responsible one that can also provide much needed jobs for years to come. In the company's view, the challenges of changing hearts and minds are metaphorical trees that block the view of the forest -- which, in APP's case, is a company that's important to the economies of the countries in which it operates, and also critical to other firms' supply chains.

Image credits: Leon Kaye

Disclosure: APP is funding Leon Kaye’s trip to China. Neither the author nor TriplePundit were required to write about the experience.