Sateri (RGE Group) (now owning the Jiangsu Xiangsheng mill)

Sateri is officially incorporated as Pacific Viscose Limited part of the Royal Golden Eagle (RGE) Group

Shanghai, China

14/35

Completion of CanopyStyle Third Party Verification Audits

Undertaking Annual Audits

Audits Public and Results Acted On

Audit risk results

n/a

Contribution to Conservation Legacies

A&E promotion

Public Collaborative Leadership

Influences Decision Makers

Legislated protection

n/a

Innovation via New Alternative Fibers

Partnerships

R&D Investments

Scaling to commercial products

Targets & timelines

Aggressively increasing commercial scale

n/a

Adoption of Robust Forest Sourcing Policy

Policy adoption

Policy meets all CanopyStyle criteria

Traceability & Transparency

COC & supplier list completed

Track & trace system in place

Public sharing of supplier list

Forest of origin is public and mapped

Leaders in Supply Chain Shifts & Sustainable Sourcing

Producer Is Proactive

FSC preference

n/a

Forest Mapper support

n/a

Associated with High Risk of Sourcing from Ancient & Endangered Forests and other Controversial Sources

Risk is known and no action is taken

Initial action taken to adress risk

n/a

Sourcing risk has been resolved

Total:

Buttons 14

Risk of sourcing from Ancient & Endangered forests

Sateri’s first annual CanopyStyle audit, published in 2018, confirmed the presence of high risk sources in their supply chain, particularly the purchase of pulp with raw material from Indonesia and Malaysia, regions with industrial logging operations that are known to impact Ancient and Endangered Forests, are important peat carbon sinks and contain endangered species habitat.

As part of the Royal Golden Eagle Group (RGE), Sateri is a sister company with APRIL, the Indonesian pulp producer and plantation company, Asia Pacific Rayon (MMCF producer) and is associated with the Toba Pulp Lestari (TPL) mill in Indonesia which is also owned by the Tanoto family. APRIL and Toba Pulp Lestari are associated with deforestation, social conflict and conversion of natural forests and peatlands.

Sateri removed direct sourcing of TPL fibre from its supply chain beginning September 2016 and has, at times, engaged them about reforming their practices. It should be noted, however, that Sateri supplier APRIL did continue to source wood fibre from TPL in 2017 into 2018. While APRIL states the TPL product did not enter the dissolving pulp supply chain, there is no independent verification of this information.

Sateri currently sources from APRIL, among others. Canopy looks forward to receiving an updated list of suppliers from Sateri.

In October 2019, Sateri took some initial steps to begin addressing the risks associated with continued sourcing from APRIL by adopting a first phase action plan.

Key progress achieved by Sateri in this first stage of its Action Plan includes:

  • Stating the company’s support and securing APRIL’s support to work with Canopy and civil society to support conservation initiatives in the Leuser;
  • Securing APRIL’s “willingness to publicly reaffirm its intention” to not source natural forest fibre from, or directly or indirectly cause the development of new plantation concessions in Intact Forest Landscapes (IFLs) in Indonesia and elsewhere, specifically in the Leuser Ecosystem, West Papua and Kalimantan;
  • New APRIL transparency measures that will increase public access to High Conservation Value (HCV) and High Carbon Stock Assessments (HCSAs);
  • Investments in Next Gen solutions and better technology. RGE has made investments in better production technology as well as NextGen solutions in Infinited Fiber Company (IFC) and Sateri has signed an MOU with Re:newcell with the aim of industrial scale production by 2025.

Remaining gaps and next stages of actions should include, but are not limited to:

  • A commitment to reduce the use of dissolving pulp inputs sourced from peat, other socially or ecologically critical forest ecosystems and fibre sourced from Ancient and Endangered Forests, replacing those with Next Generation alternatives and recycled fibre;
  • A commitment that the long-term goal of scaling up and commercializing production of Next Generation fibres will correspond with an equivalent reduction in the use of plantation fibre from peat and mineral soil regions identified as community/traditional lands under claim and/or priorities for ecosystem restoration and conservation;
  • A public commitment by RGE that no sourcing of fibre (including from supply partners or open market suppliers) will be undertaken by RGE or any of its associated companies that is derived from new development/conversion of forests in Papua, West Papua and the Leuser Ecosystem as well as from any new or additional development, including in intact or marginally fragmented forests in West Kalimantan or Kalimantan;
  • A commitment that APRIL ultimately increase its restoration commitments to more fully reflect both the current and historical impact of its operations;
  • Encouraging parent company RGE and its affiliates to resolve conflicts/land claims and remedy its legacy of social and ecological harm in order to support vibrant, healthy local communities;
  • Development of explicit targets and timelines for new innovative commercial scale product lines containing alternative and Next Generation fibres.

Of note, producers such as Sateri that are confirmed by the CanopyStyle Audits as using pulp that is known to be at high risk of sourcing from Ancient and Endangered Forests and other controversial sources, are signalled by partially red shirt colours, even if they have been able to surpass a threshold of ten buttons. As such, Canopy continues to recommend a considered approach by the marketplace at this stage. Customers should continue to liaise with Canopy and the company to monitor the timely implementation of the action plan by Sateri, recognizing that the plan will evolve to address other substantive issues of impact currently not captured in this staged prioritized process.

Key Improvements Required

  • The priority is for Sateri to implement the proposed initial action plan, and to address the prioritized gaps in order to achieve the following outcomes:
  • Support from RGE and its’ affiliates for the conversion of concession licenses within the Leuser Ecosystem into conservation or Ecosystem Restoration Concessions;
  • The protection of any/all remaining intact peatlands throughout APRIL and any supplier concessions, no net loss of peat, restoration of priority peat landscapes, suspension of the drainage of peatlands identified by best available science as priorities in need of conservation and/or restoration, and sharing reports of large-scale trials of different peatland restoration options;
  • A public commitment by RGE that no sourcing of fibre (from supply partners or open market suppliers) and no new development will be undertaken by RGE or any of its’ associated companies in the forests of Papua, West Papua and the Leuser Ecosystem as well as any new or additional development in intact or marginally fragmented forests in West Kalimantan or Kalimantan;
  • A commitment that APRIL will ultimately increase its restoration commitments to more fully reflect both the current and historical impact of its operations;
  • The development of fibres with 100% of innovative fibre sources, such as post-consumer recycled fabric sources and agricultural residues.

Sateri is one of the founding members of Collaboration for Sustainable Viscose in China. Sateri is encouraged to use its leadership position within that group to ensure that the CV roadmap aligns its raw material sourcing criteria to avoid sourcing from Ancient and Endangered Forests.
Given growth projections, Sateri should use tools such as ForestMapper to ensure future expansion plans and ventures are not located in, and not sourcing from, Ancient and Endangered Forests including areas of High Conservation Value or High Carbon Stock. We recommend that the company move quickly to have 100% of new production capacity originate from Next Generation Solution feedstock.

Areas where the company is showing leadership

Sateri is actively engaged in dialogue with Canopy and customer brands about reducing the risk currently associated with its production. While it has taken some first steps to respond to an initial action plan, the company has yet to embark on ambitious, transformational action or the implementation of significant change.

The company was one of the first global viscose fiber producers to complete and release publicly the CanopyStyle Audit and is interested in being audited regularly. Canopy, however, is recommending the second audit proceeds upon progress made via implementation of the agreed action plan addressing risk identified in its previous Audit.

Sateri’s parent company, RGE, has also recently announced a $200 million investment over ten years to support solutions in closed-loop manufacturing, with ~$70 million going to alternative cellulose or plant-based feedstock.

Sateri has formalized a collaboration with re:newcell, some R&D projects in Indonesia and China, and a collaboration with Infinited Fibre Company (IFC), a next generation solution provider which is using textile waste to produce new fibres.

Canopy and APRIL are exploring the potential of a dialogue aimed at finding common ground in addressing the sourcing of fibre for viscose in support of the overarching goals in Canopy’s framework approach. Any developments of note will be communicated by both parties if and when they emerge.

Number of viscose, lyocell and dissolving pulp mills + location and production volumes

Sateri owns four viscose mills in China, for an annual production capacity of 1 070 000 tonnes of viscose staple fibre.

  • Sateri Jiangxi mill in China has a production capacity of 225 000 tonnes of viscose staple fibre.
  • Sateri Fujian viscose staple fibre production facility has a production capacity of 290 000 tonnes.
  • Sateri Jiujiang fibre mill has a production capacity of 285 000 tonnes.
  • Sateri’s acquired in 2019 the Jiangsu Xiangsheng Viscose Fiber Co. and intended to increase production capacity from 220,000 to 300,000 tons.

In January, 2015 Sateri Holdings Limited separated into two distinct corporate entities, “Bracell Limited” and “Pacific Viscose Limited”. Bracell Limited owns and operates timberland in Brazil and the Bahia Specialty Cellulose dissolving pulp mill in Bahia, Brazil. It is one of the largest manufacturers supplying more than 10% of the world’s dissolving pulp.

Sateri produces man-made cellulosic fiber (MMCF) and nonwovens, mainly standard viscose fibres and rayon.

Sateri uses a diversity of tree species such as eucalyptus, aspen, maples, jack pine, fir, Hemlock, spruce, pine, birch and others.

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