Michelin has become the sole owner of Royal Lestari Utama (RLU), a joint venture with Barito Pacific Group. The tire maker, which previously held 49% of shares, has acquired a further 51%.
The RLU project, which was launched in 2015, aims to create the right conditions for the production of Indonesian sustainable natural rubber over a wide area of 70,000ha in Sumatra, in the Jambi province, and 18,000ha in Borneo, in the East Kalimantan province. These territories suffered great damage and deforestation before Michelin and its Indonesian partner got involved.
For nearly six years, after significant preparation work, rubber trees were planted over more than 23,000ha, and 39,000ha were preserved to develop agroforestry activities and subsistence agriculture. The project also includes a social dimension, consistently aiming at improving living standards for 50,000 inhabitants, with the creation of 4,000 jobs and the training of farmers to hevea growing and crop diversification.
The Michelin Group has invested over €1bn (US$1.05bn) in its various businesses since 2015 in Indonesia. For Michelin, this project is a significant long-term opportunity to contribute actively toward making the natural rubber sector more sustainable.