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 (also owns the Jiangsu Xiangsheng mill)

Shanghai, China

13
1
KR
shim
Known risk confirmed in audit

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

International Targets

Public Collaborative Leadership

n/a

Influences Decision Makers

Legislated protection

n/a

Extra Respon­sibilities

n/a

Innovation via New Alternative Fibers

Partnerships

R&D Investments

Scaling to commercial products

Targets & timelines

Contributing to Collective Goal

n/a

Aggressively Increasing Commercial Scale

n/a

Adoption of Robust Forest Sourcing Policy

Policy adoption

Policy meets all CanopyStyle criteria

Traceability, Transparency, and Sustainable Sourcing

Using the Dissolving Pulp Classification

Track & trace system in place

Public sharing of supplier list

Proactive sourcing decisions

n/a

Leaders in Supply Chain Shifts

Proactive Sourcing Decisions

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 13

Chemical Management

The producer is addressing the pollution originated by the chemical substances used during the MMCF production process. It has joined a credible initiative that advances solutions on chemical management. (worth 2 points)

The producer is implementing, for all of its sites, pollution control technologies to limit their impact, developing an approach for the recovery of substances used or generated during the production of MMCF.

ZDHC Responsible Fibre Production Guidelines ZDHC Wastewater Guidelines (evaluated in 2020, worth 3 points) ZDHC Air Emissions Guidelines

Total:

1 Point

Risk of sourcing from Ancient & Endangered forests

Sateri’s 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. These landscapes are important peat carbon sinks and contain endangered species habitat. Canopy is not recommending another audit until actions have been taken to address these core risks to avoid diversion of the company’s financial resources and capacity from the actions required.

As part of the Royal Golden Eagle Group (RGE), Sateri is a sister company of APRIL, the Indonesian pulp producer and plantation company, Asia Pacific Rayon, a MMCF producer, and Bracell, a Brazil-based dissolving pulp supplier, 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 have a legacy of deforestation and conversion of natural forests and peatlands. APRIL continues to operate on carbon-rich, drained tropical peatlands, and there are reports of ongoing social conflict with both pulp mills and their wood suppliers.

Sateri removed direct sourcing of TPL fibre from its supply chain beginning September 2016 and has engaged them about reforming their practices. It should be noted, 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 currently no independent verification of this information.

Sateri currently sources the majority of its pulp from APRIL and Bracell, with the remainder coming from a variety of other suppliers. 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.

Throughout 2020, Canopy continued to engage with Sateri, its parent company RGE and supplier APRIL, to focus on the outcomes required to address and mitigate the identified known risks. With a focus on solutions, Canopy has clearly articulated the concerns and proposed specific actions to mitigate or resolve issues. Canopy recognizes some progress has been made in some areas, but there are a number of major issues of ongoing concern that put RGE, APRIL and Sateri at high risk of remaining a controversial supplier.

As recently as October, 2020, an alliance of Indonesian civil society organizations and international NGOs released a report documenting deforestation and conversion of natural forest peatlands to industrial plantations by one of APRIL’s largest suppliers. In a separate report, also published in October by an international NGO, another RGE supplier was documented to be linked through palm oil operations to active deforestation  in the Leuser Ecosystem.

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 so that ongoing risk is clearly identified to users of this report. Canopy continues to recommend a considered approach by the marketplace at this stage. Brands should continue to liaise with Canopy to monitor the timely implementation of the expected key milestones by Sateri and its suppliers.

Key Improvements Required

As part of the RGE family of companies, Sateri needs to become a vocal internal advocate for meaningful, substantive change in the practices of its primary suppliers, APRIL and TPL.

Canopy encourages Sateri to provide evidence of concrete gains by APRIL and their suppliers in:

  • Securing conservation of peatlands and other high-conservation value areas (HCV) and high carbon stock forests (HCS) with the free, prior and informed consent of impacted communities;
  • Effectively resolving land claims and conflict with traditional and local communities, including halting any activity on disputed lands, and excising customary lands where consent has not been, or is not being, given; and
  • Implementing concrete and effective measures to remediate or provide restitution for the company’s legacy of adverse social and environmental impacts, including meeting restoration requirements dictated by science through increasing APRIL’s stated target of a 1:1 restoration ratio.

In addition to ensuring an end to deforestation, peatland degradation, and human rights violations in their supply chain, Sateri must accelerate the commercial production of Next Generation fibre solutions. Sateri should provide documentation of its efforts to ensure that if/as RGE scales up Next Gen inputs, there is a verified corresponding and equal reduction in the use of peatland-sourced wood fibres. Next Gen should not become a niche product, but instead help reduce Sateri and their primary suppliers’ reliance on fibre sourced from drained tropical peatlands, HCV areas, and HCS forests and from community land areas.

Sateri should prioritize the integration and sourcing of Next Generation Solution technologies and feedstocks for future expansion plans and/or new suppliers. At a minimum, use it should ForestMapper and complementary guidance documents such as the advice note of Ancient and Endangered Forests and the Dissolving Pulp Classification to ensure no additional sourcing from Ancient and Endangered Forests as capacity expands.

Sateri and APRIL continue to prioritize marketing, financially sponsoring and participating in sustainability fora. Progress on sustainability by RGE companies should continue to be measured by concrete steps that lead to tangible outcomes which address core risks that affect climate, biodiversity, and communities on the ground.

Canopy will continue to seek solutions and report on actions that truly advance conservation, address the rights of impacted communities, mitigate the growing biodiversity and climate crises, and effectively address the legacy of adverse environmental and social impacts resulting from conversion of natural forests and peatlands to plantations after 1994.

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 Sateri has taken some first steps to respond to the call to address risk in their supply chain, the company and its main supplier, APRIL, have yet to embark on ambitious, transformational implementation of meaningful ‘’on the ground’’ change.

The company was one of the first global viscose fibre producers to complete and release publicly the CanopyStyle Audit and is interested in being audited regularly. Canopy, however, is recommending the second audit proceeds following further progress to address sourcing risk identified in its previous audit.

As noted in the 2019 Hot Button, Sateri’s parent company, RGE, announced an investment over ten years to support solutions in closed-loop manufacturing, with a percentage going to alternative cellulose or plant-based feedstock. With the introduction of the brand “Finex”, the company has launched production of viscose with recycled content. Their new product contains up to 20% recycled material. The remaining fibre remains high risk.

We are strongly encouraging any investment and exploration in Next Generation fibres be used as substitution for controversial fibre sources.

Canopy, APRIL and RGE have been in dialogue, exploring potential solution pathways and seeking common ground in addressing key issues and risks associated with the sourcing of forest fibre for dissolving pulp and viscose. Any progress of note will be communicated, if and when it emerges.

“Finex” is the company's viscose with recycled content, it contains up to 20% recycled material. The remaining fibre remains high risk.

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

Sateri owns five viscose mills and one lyocell facility in China, for an annual production capacity of about 1.4 million tonnes of viscose staple fibre and 20,000 tonnes of lyocell, respectively.

  • Sateri (Jiangxi) Chemical Fibre Co Ltd in China has a production capacity of 230,000 tonnes of viscose staple fibre.
  • Sateri (Fujian) Fibre Co Ltd viscose staple fibre production facility has a production capacity of 300,000 tonnes per annum.
  • Sateri (Jiujiang) Fibre Co Ltd has a production capacity of 335,000 tonnes.
  • Sateri (Jiangsu) Fiber Co. Ltd was established in 2019 after a one year lease and subsequent acquisition of Jiangsu Xiangsheng Viscose Fiber Co. in 2019. The mill has a production capacity of 300,000 tonnes per annum.
  • Sateri (China) Fibre Co Ltd started production in end 2019 and has production capacity of 250,000 tonnes per annum.
  • 20,000 tonnes of lyocell production per annum at mill in Rizhao, Shandong.

In 2015, Sateri Holdings Limited separated into two distinct corporate entities, “Bracell Limited” and “Pacific Viscose Limited”. Bracell Limited operates timberland in Brazil as well as 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. It is a strategic supply partner of Sateri.

Sateri produces man-made cellulosic fibre (MMCF) and nonwovens, including standard viscose fibres and lyocell.

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