The Sumatera Dinamika Utama Group, third largest deforester in Indonesia’s pulp and paper sector over 2020

Jun 2021

The company group Sumatera Dinamika Utama (SDU) was the third largest deforester in Indonesia’s pulp and paper sector in 2020, mainly due to its plantation company PT Permata Borneo Abadi, which cleared 850 hectares of forests. Little public information is available on SDU. However, it is the most important supplier to Indonesia’s second largest pulp and paper producer Royal Golden Eagle (RGE). The 2020 deforestation was a breach of RGE’s no-deforestation commitment.

Sequence of deforestation by Permata Borneo Abadi
Sources: Satellite imagery, forest cover maps 2016 Indonesian ministry for Environment and forestry. Coordinates clearing area: 0°31’38.28″N; 116°15’1.74″E.

SDU is one of RGE’s “long term partners”, supplying the company with wood fibers. The SDU plantation companies supplying RGE have a concession area of 400,000 hectares. SDU also appears to have ownership links to RGE, being owned by several of RGE’s ex-employees. Its plantation companies have overlapping directors and commissioners. SDU does not have an official name or a website, and it is actually only in social media accounts and job advertisements that it is called Sumatera Dinamika Utama group. SDU does not have any known sustainability policy.

Company structure of SDUs industrial tree operations
Source: Retrieved Indonesian notary acts on subsidiaries of and related companies to the Sumatera Dinamika Utama group, October – December 2020.

RGE’s sustainability commitment states that all its third-party Indonesian wood suppliers should not clear High Conservation Value and High Carbon Stock areas. PT Permata Borneo Abadi’s clearing of natural forests in 2020 is clearly a breach of this commitment. There is no public information available on whether RGE has engaged with the company to stop the deforestation.

PT Permata Borneo Abadi has a concession area of 49,000 hectares, and it is located in East Kutai district of East Kalimantan province. It was not the only SDU plantation company clearing forests in 2020. SDU’s PT Sumatera Riang Lestari cleared 300 hectares of forests in Riau province.

Earlier this year, the Nusantara Fiber group, the largest deforester for industrial trees in 2020, acquired PT Permata Borneo Abadi from SDU.

The same ex-employees of RGE that own SDU also own palm oil operations under the name Anugrah Superventure. With its 29 mills and/or kernel crushers, Anugrah Superventure is among the world’s ten biggest mill owners. Anugerah Superventure also doesn’t operate under a known sustainability policy.

For more information, please contact Chris Wiggs