How APP’s Paper Mills Demonstrate Both Strength and Sustainability

The reason why Asia Pulp and Paper (APP) has become the largest company within the industry (or second largest, depending on the source cited) is its ability to scale. With size, of course, comes more scrutiny. Hence the negative press earlier this decade as many of the world’s most influential NGOs called attention to what they described as the company falling short of meeting environmental regulations within the countries in which it operates. APP replied that it always followed local laws and now, insists that its mills operate beyond compliance.

As evidence, APP recently opened two of its mills to journalists visiting the company’s operations in China. The company says the mills are amongst the world’s largest and most efficient within the industry. As we explored the company’s paper mills, APP representatives pointed out features they said are designed to minimize the company’s impact on the local environment.

The first mill is in Ningbo, China, which is about a 130-mile (215 km) drive south of Shanghai. To say this $1.8 billion mill is massive would be an understatement. Located a 20-minute drive from Ningbo’s city center, the mill operates as a small city in itself. About 1,600 employees live adjacent to the mill and have access to amenities such as gyms, cafeterias and health care.

And those employees manage a plant so huge that the site has its own port, through which processed wood pulp comes from across APP’s supply chain. Most of the pulp is churned into white board, the stiff paper product used for a variety of purposes from packaging to gift bags. According to APP, this plant’s total capacity is 1 million tons of white board, which is spun into massive roles before it is cut and shipped across the world. To understand just how huge APP is, the Ningbo plant can finish one jumbo roll in 45 minutes — and the factory operates 24 hours a day. The average for other paper mills worldwide, based on data APP supplied to the visiting journalists, is about eight jumbo rolls per day.

This is not the kind of visit for those who have a sensitive olfactory sense. The smell is best described as burning plastic combined with rotten garbage and the locally popular durian fruit. The entire process, which includes coating and bleaching, clearly has its environmental impact.

To that end, APP says it invested about 500 million Chinese Yuan, or $76 million, in environmental protection. Highly efficient boilers help scrub out the noxious sulfur and nitrogen oxide that nationwide contributes to China’s debilitating air pollution. An onsite waste water treatment plant scours 40,000 tons of water a day, which is discharged 10 meters (33 feet) under the sea.

Is this anywhere near the closed-loop and zero-impact system companies in the West say they are working toward? Nowhere close, if we lean on North American or European standards. Is this mill an exemplar for industry in China? According to APP’s representatives, the answer is a resounding yes.

Even more impressive, or jarring depending on one’s point of view, is the company’s mill on Hainan Island. Unlike the Ningbo plant, which takes in pulp from other facilities, the Jinhai Pulp Mill starts its manufacturing process from the very beginning with wood. In addition to trees harvested from elsewhere in the country, wood chips are hauled in to the mill’s adjacent seaport — provided, as APP representatives assured me, they adhered to the company’s zero-deforestation policy.

Located in one of China’s special economic zones, this mill is overwhelming. According to the company, it is the world’s largest single-pulp mill, with a machine that is half a kilometer (1,640 feet) long and is centered in an area that comprises 4 square kilometers. Again, APP says the mill operates at a much higher environmental standard than what is required under Chinese law.

While the company offered few specifics, let's just say that based on the relatively benign scent, seeing is close to believing. Black liquor, the noxious byproduct that accumulates as lignin and is removed from pulp in order to manufacture bright and white paper, is processed into biofuel that then contributes to the plant’s power needs. In addition, the resulting waste water is so clean, explained APP’s representatives, that it supplies a huge carp pond on-site that is the main attraction for visitors touring the massive facility. The entire site is also remarkably clean, organized and almost looks like a ghost town — belying the company’s claim that this site produces 1.2 million metric tons per year.

The global pulp and paper industry is overall a vastly polluting one, as many environmental NGOs remind us. But APP claims that the investments it made in its mills show that the company, in tandem with its zero-deforestation policies, is making progress.

Image credits: Leon Kaye, APP

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