ITOCHU announces start of commercialization of PROJECT TREE, the world’s first blockchain-based natural rubber traceability and sustainability project
ITOCHU Corporation (head office in Minato-ku, Tokyo; Keita Ishii, President and COO; hereinafter “ITOCHU”) announced today that ITOCHU has started the commercialization of PROJECT TREE for traceability and sustainability of natural rubber (hereinafter “the project”), using the value chain of its subsidiary PT. Aneka Bumi Pratama (head office in South Sumatra, Indonesia; Hisashi Yajima, CEO, hereinafter “ABP”), a natural rubber processor and tire wholesaler and retailer EUROPEAN TIRE ENTERPRISE LIMITED (head office in Letchworth , United Kingdom, Shinjiro Tanaka, CEO; hereinafter “ETEL”). As a first step of the project, ITOCHU will begin distribution in the UK market in December in cooperation with Pirelli UK (a wholly owned subsidiary of Pirelli Spa headquartered in Milan, Italy), a globally recognized tire manufacturer.
The world’s leading tire manufacturer Hankook Tire & Technology Co., Ltd. (headquartered in Gyeonggi-do, Korea; Sooil Lee, CEO) also plans to participate in the project in the future.
Natural rubber is a vital natural resource in everyday life. Tire production accounts for about 70% of global natural rubber consumption, but about 85% of global production is driven by smallholders in Southeast Asia, mainly Thailand and Indonesia. The demand for natural rubber is expected to continue to grow steadily due to global motorization. Therefore, it is essential that we pay more and more attention to issues such as deforestation, poverty and the violation of human rights in our business activities. All stakeholders in the supply chain, including smallholders, tire manufacturers and distributors, should participate in these efforts.
ITOCHU is actively involved in the natural rubber sector through ABP, one of the largest Indonesian natural rubber processing companies, and ETEL, one of the largest retail and wholesale companies. of tires in Europe. The project is to take full advantage of the global value chain that ITOCHU is able to assemble as SOGO SHOSHA The project uses a blockchain-based traceability system developed by ITOCHU Techno-Solutions Corporation (headquartered in Minato-ku , Tokyo: Ichiro Tsuge, President and CEO; hereinafter “CTC”). This is the first attempt to establish traceability using blockchain in the natural rubber industry.
ABP uses a smartphone app linked to the system for its sourcing of natural rubber raw materials. The app records information such as the date and location of transactions using blockchain technology. This information is shown on the map along with the protected forests which are the habitats of many wildlife species. Then, the raw materials are stored separately from other materials and processed in the ABP factory. They are sold to tire manufacturers as natural rubber with blockchain-secured traceability information. Incentives to upstream supply chain actors who cooperate to register their transactions will be funded by a portion of tire sales supported by PROJECT TREE. Smallholders who do not have a smartphone or bank account can receive farming tools, fertilizers and / or training to increase productivity and awareness of good farming practices. In addition, ITOCHU will sequentially execute improvement plans based on the results of its supply chain risk assessments. These assessments were carried out with the support of Proforest South East Asia and SNV Indonesia.
One of the objectives of PROJECT TREE is to involve all natural rubber stakeholders, including processors, tire manufacturers and wholesalers / retailers, car manufacturers and consumers beyond the value chain. of the ITOCHU Group. Tires manufactured through PROJECT TREE will gradually be distributed in overseas markets while commercialization activities will begin in Europe, where people tend to be more environmentally aware. PROJECT TREE is expected to contribute to ITOCHU’s CSR policy goals and the goals of other participating members of the Global Platform for Sustainable Natural Rubber (GPSNR), a newly established global platform for natural rubber production. sustainable, of which ITOCHU is a founding member.
Statements by project members
■ Pirelli UK (cooperating tire manufacturer)
“Pirelli Francepartnered with ETEL to work on the sale of PROJECT TREE supporting tires, with particular appreciation for its innovative approach to blockchain and natural rubber sourcing traceability.
It is indeed an important step forward towards more transparency in the natural rubber supply chain and, at the same time, a key instrument to allow the implementation of sustainability actions in the fields of natural rubber. origin of rubber.
For several years, Pirelli has adopted a policy of sustainable management of natural rubber and has engaged in activities, in different scopes, to support natural rubber sustainability initiatives, as in the case of the project joined by Pirelli UK.”
■ Hankook Tire & Technology Co., Ltd. (cooperating tire manufacturer) / Sooil Lee, President and CEO of Hankook Tire & Technology.
“As the demand for natural rubber is expected to continue to grow, all stakeholders in the supply chain, including smallholders, tire manufacturers and end users, must take responsibility, Hankook Tire, with sustainability being one of the company’s priorities. , will definitely take the lead in fostering sustainability in the supply of raw materials in order to create a better world in which to live. “
■ Industrial group and cooperating NGOs
– Stefano Savi, Director of GPSNR
“Improving traceability and transparency is crucial to our goal of a fair, equitable and sustainable natural rubber supply chain. PROJECT TREE’s work in developing a holistic traceability system is a laudable effort towards this larger goal. This, along with the efforts of other GPSNR members, has the potential to positively and systematically transform the supply chain. “
– Langlang Tata Buana, Senior Project Manager of Proforest
“Our work on all commodities, including rubber, is guided by the vision of positive agricultural commodity production for people living and dependent on the landscape, environment and climate. Our field experience working with smallholders means that we can provide support in the mitigation of human rights and environmental risks, as well as advice on the implementation of best management practices through the training and capacity building. PROJECT TREE is an example where we bring our Responsible Sourcing to Smallholder (RSS) program expertise to build partnerships and collaborate with key stakeholders.“
– Rizki Pandu Permana, Head of Agriculture SNV Indonesia
“SNV supports all the efforts of sustainability practices by players in the natural rubber sector. As initiated by PROJECT TREE, traceability is one of the means to achieve the goal of sustainability and improve transparency in the supply chain. We are pleased to see that PROJECT TREE will combine the traceability system with full support to smallholders under Responsible Smallholder Sourcing (RSS). The combination is essential to ensure that rubber is produced responsibly (from sources without deforestation), the productivity and quality of smallholders are increased, and relationships with all actors in the supply chain are well nurtured. Finally, the system is also expected to improve the welfare of smallholders in the supply chain.“
■ DBS Bank Ltd. / Abdul Raof Latiff, Group Head of Digital Ecosystems and Partnerships and Country Head in Malaysia (Corporate and Cooperation Bank)
“With sustainability being one of DBS’s key principles, we are committed to supporting like-minded companies such as ITOCHU in promoting their ESG programs. The PROJECT TREE initiative is a critical and necessary step in moving the rubber industry towards more sustainable practices that generate both positive environmental and societal benefits. We look forward to supporting all players in the rubber ecosystem as they collectively move forward in their transition to sustainability. This will enable the industry to build supply chains that are not only efficient, but also climate-friendly and supporting the communities in which they operate, building towards a more inclusive and sustainable future. “
■ CTC / Junji Hirooka, Managing Director and COO, Distribution Group and COO, Global Business Group
“ITOCHU Techno-Solutions Corporation (CTC) has identified hardware issues involving three challenges related to the SDGs that have prompted us to act in accordance with our corporate mission statement; “Harnessing the potential of IT to change the future for the global good. PROJECT TREE is a project perfectly aligned with one of our Group’s principles of “Providing Trusted IT Services”, and we will leverage cutting-edge technologies to contribute to sustainability throughout the value chain. “
■HeveaConnect / Gerald Tan, CEO by HeveaConnect
“HeveaConnect and ITOCHU share the same belief that improving the livelihoods of small rubber farmers is essential for moving towards a truly sustainable natural rubber industry. Smallholders are now encouraged to provide more data on their production process, which increases the transparency of the natural rubber supply chain. This is also very timely given the increased demand for sustainable natural rubber driven by regulatory requirements around the world.PROJECT TREE traceability data with physical rubber in our factory management system to create data backed rubber, ITOCHU allows greater visibility into the origins of natural rubber that their customers buy through the HeveaConnect platform. We are very happy to partner with ITOCHU to improve the transparency of the natural rubber supply chain through the TREE project and the HeveaConnect platform. “
ITOCHU’s Brand-new Deal 2023, its medium-term management plan, includes “business transformation by incorporating consumer needs into products” and “continued contribution to / efforts to achieve ODD ”in its basic policies. ITOCHU will strengthen its natural rubber value chain and hopes to contribute to the sustainability of the entire natural rubber industry through this project.
PROJECT TREE website
training to increase productivity and awareness of Good Agricultural Practices