Partners Have High Hopes for Rubber Tree Venture

Michelin & Cie and PT Barito Pacific Tbk have formed a joint venture to produce natural rubber in Indonesia. Michelin, which has a 53% stake, is contributing $55 million to the venture.

The partnership involves the restoration of three areas totaling 217,500 acres that have been severely deforested. Rubber trees with the capacity to produce as much as 97,000 tons per year will be planted in Sumatra and Borneo.

About half the land is being designated for recreating a natural environment and producing community crops, according to the partners. They estimate the project will create more than 16,000 direct and indirect local jobs.

Michelin also has entered into a four-year agreement with the WWF Network (formerly World Wildlife Fund) to better understand Indonesia's environmental issues and develop the best planting solutions for the area, including restoring fauna and flora. It also will work with WWF to promote global practices for rubber tree plantation and the extraction and transformation of latex.

Jakarta-based Barito Pacific is a diversified industrial company with businesses in the petrochemicals, geothermal, power, oil and gas and mining. WWF, with 5 million members and operations in more than 100 countries, aims to educate, promote and improve environmental sustainability, and help businesses reduce their ecological footprint.