Michelin now sole owner of RLU sustainable rubber project

With the purchase of the 49 per cent shareholding that integrated energy company Barito Pacific Group had in Royal Lestari Utama (RLU), the joint venture pilot project to develop sustainable rubber tree plantations in Indonesia becomes a 100 per cent Michelin-owned affair. Moving forwards, Michelin views RLU as a “significant long-term opportunity to actively contribute to making the natural rubber sector more sustainable.”

The RLU project began in 2015 and aims to create the right conditions for producing sustainable natural rubber over a 70,000-hectare area in Sumatra’s Jambi province and across 18,000 hectares in Borneo’s East Kalimantan province. Michelin notes that these territories suffered great damage and deforestation before it and Indonesian partner Barito Pacific became involved.

By taking on full ownership of RLU, Michelin “reasserts its trust in the project and the long-term vision it requires.” The substantial work carried out since 2015, which has been widely documented, has led to a number of social and environmental improvements.

For nearly six years, after significant preparation work, rubber trees were planted over more than 23,000 hectares, and 39,000 hectares were preserved notably to develop agroforestry activities and subsistence agriculture. The project also includes a social dimension, consistently aiming at improving living standards for 50,000 inhabitants, by creating approximately 4,000 jobs, training farmers in rubber tree growing and diversifying crops.

A more sustainable natural rubber sector

Since 2015, the Michelin Group has invested over a billion euros in its various business in Indonesia. The company views this project as a “significant long-term opportunity to actively contribute to making the natural rubber sector more sustainable.”

Beyond these major improvements, Michelin is fully aware of the difficulties faced by a project of this magnitude. The natural rubber value chain is highly complex and fragmented and there is still much to be done on the commercial, environmental, and social fronts.

“Becoming the sole owner of RLU means Michelin will continue investing in a demanding but remarkable long-term project which combines social dimension, environmental protection and economic performance,” says Vincent Rousset-Rouvière, the Michelin Group’s purchasing director. “We are proud of the actions taken with our Indonesian partner Barito Pacific, whom we thank for their contribution to the project since its launch in 2015. We are also confident in RLU’s future ability to support the transformation of the natural rubber sector in Indonesia while improving living standards and preserving forests and ecosystems.”