Asia Pulp Paper

Asia Pulp & Paper, commonly known as APP, is a major Indonesian pulp and paper group headquartered in Jakarta and controlled by the Sinar Mas Group. It operates as an industrial business rather than as a single consumer-facing product label, with activities spanning plantation fiber, pulp, paper, tissue, packaging, and related converting operations. Its principal Indonesian operating companies include Indah Kiat Pulp & Paper, Tjiwi Kimia, Lontar Papyrus, Pindo Deli, and Ekamas Fortuna, while its Chinese activities have included a number of large paper and pulp mills. The group’s roots date to 1972, when Eka Tjipta Widjaja established Pabrik Kertas Tjiwi Kimia with Taiwanese investors. The venture was created to manufacture paper and formed part of the expanding collection of commodity and industrial businesses associated with what became Sinar Mas. Indah Kiat was established in 1976 as a joint venture involving Indonesian and Taiwanese paper companies, and Sinar Mas subsequently acquired a controlling interest. Tjiwi Kimia entered Indonesia’s public markets in 1990. During the early 1990s, the group expanded into China, establishing or developing paper-industry assets in regions including the Yangtze River and Pearl River deltas. APP was formally established in 1994, when Sinar Mas consolidated pulp and paper operations associated with Tjiwi Kimia and Indah Kiat. It was listed on the New York Stock Exchange the following year and undertook substantial capital investment during the 1990s. By the end of that decade, the group’s paper and packaging output exceeded four million metric tonnes annually, according to the cited historical account. The rapid expansion left APP heavily exposed to the Asian financial crisis. In 2001, it defaulted on approximately US$12 billion of debt, producing a prolonged restructuring process involving its Indonesian subsidiaries, creditors, and later a debt-for-equity arrangement affecting APP China. APP’s business has long been commercially significant but environmentally contested. Greenpeace, Rainforest Action Network, and other organizations have criticized the group and its suppliers over alleged natural-forest clearing, peatland impacts, habitat loss, fires, and associated social issues. These campaigns affected relationships with retailers, financial institutions, certification bodies, and consumer brands. APP responded through legality certification, sustainability roadmaps, conservation programs, third-party monitoring arrangements, fire-management investments, and its 2013 Forest Conservation Policy. The policy committed the group to ending natural-forest clearance across its supply chain and increasing reliance on plantation-grown fiber, while allowing outside observers to assess implementation. The company’s sustainability record remains a central part of its public identity. APP has reported plantation expansion, High Conservation Value and High Carbon Stock assessments, forest restoration, tiger conservation, and fire-prevention programs. It has also received or pursued certifications and labels connected with timber legality, responsible forestry, and paper products. At the same time, environmental organizations and other stakeholders have continued to question whether production expansion and mill capacity are compatible with the group’s forest-conservation commitments. APP therefore occupies a complex position: it is one of the world’s largest pulp and paper businesses, a significant supplier to international markets, and a company whose operating model is closely scrutinized because of the ecological and social effects associated with plantation forestry and industrial pulp production.

Asia Pulp & Paper developed from the Sinar Mas Group’s expansion into paper manufacturing. In 1972, Eka Tjipta Widjaja founded Pabrik Kertas Tjiwi Kimia with Taiwanese investors. The company’s initial purpose was paper production, building on Widjaja’s broader commodity and industrial activities. Indah Kiat was created in December 1976 as a joint venture involving CV Berkat of Indonesia, Chung Hwa Pulp Corporation, and Yuen Foong Yu Paper Manufacturing Company. Sinar Mas later acquired 67 percent of the venture, making it a core part of the group’s pulp and paper platform. Tjiwi Kimia became publicly traded on the Jakarta and Surabaya stock exchanges in 1990. The group then began building a Chinese presence in 1992, developing or acquiring interests associated with mills including Ningbo Zhonghua, Goldeast Paper, Ningbo Asia, Gold Huasheng, Gold Hongye, Hainan Jinhai Pulp and Paper, and Guangxi Jingui Pulp & Paper. This expansion broadened the business beyond Indonesia and gave it access to one of the world’s largest paper markets. In 1994, Sinar Mas formally created Asia Pulp & Paper in Singapore and combined pulp and paper operations associated with Tjiwi Kimia and Indah Kiat. APP was listed on the New York Stock Exchange in 1995. It pursued aggressive capacity growth and reportedly invested US$4.7 billion in capital projects during 1996 and 1997. By 1999, annual paper and packaging production had passed four million metric tonnes. The Asian financial crisis led to a severe reversal. In 2001, APP defaulted on approximately US$12 billion of debt. The resulting restructuring involved the group’s Indonesian subsidiaries and the eventual separation of APP China through a debt-for-equity transaction. APP later agreed to a repayment program covering approximately US$7 billion of Indonesian subsidiary debt over ten years. Its headquarters moved back to Indonesia as the group reorganized its corporate structure. By 2010, the group operated five major Indonesian paper-mill companies—Indah Kiat, Lontar Papyrus, Pindo Deli, Tjiwi Kimia, and Ekamas Fortuna—and maintained substantial production in both Indonesia and China. During the same period, APP sought to respond to criticism of its environmental record. It hired Patrick Moore, a former Greenpeace activist, to author a report defending the company’s position on Indonesian deforestation. Environmental groups nevertheless continued to campaign against APP, arguing that its supply chain was connected to natural-forest clearing and that mill expansion created pressure on forests, peatlands, and local communities. APP announced its Sustainability Roadmap Vision 2020 in 2012. The plan called for dependence on plantation-grown raw material and the application of High Conservation Value Forest standards to suppliers. Indonesian mills had obtained SVLK timber-legality certification by that time, and the European Commission authorized imports of the group’s fiber products under the relevant legality framework. In February 2013, APP announced that it had stopped clearing natural forests across its supply chain. It developed a Forest Conservation Policy with The Forest Trust and Greenpeace, introduced High Conservation Value and High Carbon Stock assessments, and invited independent observers to monitor implementation. The company also launched an online monitoring dashboard intended to make technical information more accessible. Conservation initiatives included the 2010 creation of the 106,000-hectare Senepis Buluhala Tiger Sanctuary for Sumatran tiger protection. In 2014, APP coordinated with Indonesian authorities and nongovernmental organizations on a plan to restore and support conservation across 2.5 million acres of Indonesian rainforest. APP received PEFC certification in 2015. Following criticism connected with the 2015 Southeast Asian haze, the group reported investing US$100 million in an Integrated Fire Management System and later obtained enhanced Singapore Green Label certification after audits of suppliers. APP has also faced continuing scrutiny over the relationship between production growth and conservation. Expansion plans involving areas such as Sumatra’s Kampar Peninsula raised concerns among environmental partners that additional capacity could outpace plantation fiber and undermine the Forest Conservation Policy. APP commissioned a growth-and-yield and wood-supply study, reported in 2014 as finding adequate plantation resources for existing mills and a planned mill in South Sumatra. Because the reported results were not published in full, outside parties could not independently verify all of the conclusions. The company’s history consequently combines international industrial expansion, a major debt restructuring, environmental controversy, and repeated efforts to build credibility through certification, conservation, fire management, and third-party monitoring.

1. 2015APP receives PEFC certification and faces haze-related scrutiny

   APP receives PEFC certification while Singapore authorities and environmental stakeholders scrutinize its possible connection to the regional haze crisis.

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2. 2013Forest Conservation Policy is introduced

   APP announces a policy ending natural-forest clearance across its supply chain and begins working with The Forest Trust and Greenpeace on implementation and monitoring.

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3. 2012Sustainability Roadmap Vision 2020 is announced

   APP announces objectives focused on plantation fiber, High Conservation Value Forest standards, and supply-chain monitoring.

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4. 2010Senepis Buluhala Tiger Sanctuary is created

   APP establishes a 106,000-hectare sanctuary intended to support conservation of the endangered Sumatran tiger.

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5. 2001Debt default and restructuring

   APP defaults on approximately US$12 billion of debt during the Asian financial crisis and begins a major restructuring process.

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6. 1995APP is listed in New York

   APP begins trading on the New York Stock Exchange.

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7. 1994Asia Pulp & Paper is formally created

   Sinar Mas incorporates APP in Singapore and consolidates pulp and paper operations connected with Tjiwi Kimia and Indah Kiat.

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8. 1992Expansion into China begins

   The group starts developing paper-industry operations in China, including mills in the Yangtze River and Pearl River delta regions.

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9. 1990Tjiwi Kimia enters Indonesian public markets

   Tjiwi Kimia begins trading on the Jakarta and Surabaya stock exchanges.

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10. 1976Indah Kiat is formed

    Indah Kiat is established as a joint venture involving Indonesian and Taiwanese paper companies; Sinar Mas later acquires a controlling stake.

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11. 1972Tjiwi Kimia is established

    Eka Tjipta Widjaja and Taiwanese investors establish Pabrik Kertas Tjiwi Kimia, the principal historical foundation of APP’s Indonesian paper operations.

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A large-scale, vertically integrated pulp and paper producer serving industrial, commercial, packaging, tissue, and office-paper markets, with sustainability and forest-conservation commitments central to its corporate positioning.

• Market pulpPulp

  Wood fiber pulp produced for use by paper, tissue, packaging, and other converting manufacturers. APP’s pulp operations supply both the group’s integrated mills and external industrial customers.

• Printing and writing paperPaper

  A broad range of office, copy, printing, and publishing papers manufactured through APP’s Indonesian and Chinese paper operations. These products serve commercial printers, offices, institutions, and distributors.

• Tissue and hygiene paperTissue

  Tissue-related grades and converted hygiene materials made from the group’s pulp and paper platform. The category includes inputs and finished products for consumer, commercial, and institutional use.

• Packaging paper and paperboardPackaging

  Paper and board used for cartons, containers, wrapping, industrial packaging, and other converted applications. Packaging has been an important part of APP’s historical production base.

• 2015Integrated Fire Management System

  Indonesia · Singapore

  Following regional haze criticism, APP reported a US$100 million investment in an integrated system covering fire prevention, detection, suppression, and supplier-related monitoring.

  Outcome. APP reported reduced forest fires after implementation and later regained enhanced Singapore Green Label certification following audits of suppliers.

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• 2013Forest Conservation Policy

  Indonesia · International supply chain

  APP worked with The Forest Trust and Greenpeace to develop a policy intended to stop natural-forest clearance across its supply chain, strengthen plantation sourcing, and apply High Conservation Value and High Carbon Stock assessments.

  Outcome. Greenpeace and other organizations welcomed the commitment cautiously and continued to monitor implementation. APP reported that natural-forest clearing had stopped in February 2013, although later expansion and conservation concerns remained contested.

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• 2012Sustainability Roadmap Vision 2020

  Indonesia · International supply chain

  APP announced a sustainability program centered on plantation-grown raw materials, High Conservation Value Forest standards, legality certification, and independent audits.

  Outcome. The roadmap established a framework for later forest-conservation and supply-chain monitoring measures, but stakeholders continued to debate whether capacity expansion was compatible with its objectives.

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• 2015Investment in integrated fire managementOther

  APP and its suppliers faced heightened scrutiny after the 2015 Southeast Asian haze and related certification restrictions in Singapore.

  What changed. APP reported investing US$100 million in an Integrated Fire Management System and improving fire suppression and supplier oversight.

  Aftermath. The Singapore Environment Council later restored enhanced Green Label certification after audits, enabling affected products to return to retail shelves.

  Reported investment in Integrated Fire Management System. US$100 million (After the 2015 haze-related scrutiny)

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• 2013Adoption of the Forest Conservation PolicyStrategy

  APP faced sustained campaigns alleging that its supply chain contributed to natural-forest loss and habitat damage in Indonesia.

  What changed. APP committed to ending natural-forest clearance across its supply chain, increasing reliance on plantation fiber, conducting HCV and HCS assessments, and permitting third-party observation.

  Aftermath. Environmental groups expressed cautious optimism, while concerns persisted over implementation, mill expansion, and the adequacy of plantation fiber supplies.

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• 1994Consolidation of Sinar Mas pulp and paper operationsStrategy

  Sinar Mas had accumulated significant Indonesian and Chinese paper-industry assets through Tjiwi Kimia, Indah Kiat, and related operations.

  What changed. It created APP in Singapore and consolidated major pulp and paper activities under the APP structure.

  Aftermath. The consolidation supported international expansion and preceded APP’s 1995 New York listing.

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• 2015Environmental criticism and Southeast Asian hazeControversy

  APP faced continuing accusations from environmental groups concerning natural-forest and peatland impacts. Singapore authorities named APP among companies potentially responsible for the 2015 haze, prompting temporary restrictions on product certification and retailer withdrawals.

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• 2001Debt defaultControversy

  APP defaulted on approximately US$12 billion of debt during the Asian financial crisis, leading to a long restructuring process involving creditors and operating subsidiaries.

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• 2003Indah Kiat challenges a dollar-denominated debt issue in Indonesian court

  APP subsidiary Indah Kiat sued the underwriter and holders of a 1994 US-dollar debt issue under New York-law documentation. An Indonesian court later declared the debt invalid in 2007.

  LawsuitOther
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• 2001APP defaults on approximately US$12 billion of debt

  The Asian financial crisis exposed APP to a major debt crisis. The group defaulted on approximately US$12 billion and subsequently pursued restructuring arrangements involving its Indonesian operations and APP China.

  BankruptcyOther
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• APP products regain Singapore Green Label certification

  After APP invested in an integrated fire-management system and its suppliers underwent audits, the Singapore Environment Council later granted enhanced Green Label certification, allowing affected products to return to Singapore shelves.

  RegulationOther
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1. Asia Pulp & Paper