Project with German Federal Ministry for Economic Cooperation and Development for digital traceability of natural rubber in Indonesia is being expanded
Number of small farmers involved to be expanded from 450 to 4,000 by 2024
Digitisation of the entire supply chain enables full traceability
“Education and digitalisation are important contributors to making our supply chains sustainable,” says Claus Petschick, Head of Sustainability for the Tires business area
Continental is extending its commitment to sustainability in the natural rubber supply chain. The premium tyre manufacturer and the German Federal Ministry for Economic Cooperation and Development (BMZ) have agreed on a significant expansion of their successful project, to ensure full traceability of the natural rubber supply chain in the Indonesian province of West Kalimantan in Borneo. Here, 4,000 small farmers, rather than the previous 450, are to now be involved in the project by 2024. The project objective remains the same: small farmers in the natural rubber sector are trained to grow high-quality raw materials in compliance with clearly defined sustainability criteria. By improving the quality of the raw material, the income of smallholders is to be increased.
“Continental’s goal is to achieve 100 percent sustainable supply chains by 2050. The valuable experience we are gaining in this project allows us to progressively increase the transparency of our natural rubber supply chains,” says Claus Petschick, Head of Sustainability for the Tires business area. He adds, “Education and digitalisation are important contributors to making our supply chains more sustainable. Together with our partners in Borneo, we are demonstrating that this can be achieved in the natural rubber sector. I am pleased that we are now significantly expanding this successful project.” Indonesia is one of the world’s largest producers of natural rubber. The Kapuas Hulu district, where Continental is collaborating with the BMZ, has two national parks that have been selected as biosphere reserves by UNESCO.
Continental and the BMZ already implemented a digital traceability system for natural rubber in the project region back in 2018. With the help of the system, all steps of the natural rubber supply chain can be evaluated in detail - from cultivation to further processing at Continental's tyre plants. The cultivation areas mapped by GPS, raw rubber delivery quantities and sales prices achieved are documented in the system for each transaction. For the further processing of the raw rubber produced in the project, and in the implementation of the traceability, the project partners work in particular with the natural rubber suppliers Southland Global and Halcyon Agri Corporation.
Sustainable and responsible business practices have already been an integral part of Continental’s corporate strategy for many years and an important part of the “Vision 2030” strategy program for the Tires business area. The tyre manufacturer aims to differentiate itself specifically with sustainable technologies and innovative solutions. The focus here is on the strategic topics of climate action, low-emission mobility, the circular economy and sustainable supply chains and therefore all phases along the value chain. The company’s “Natural Rubber Sourcing Policy” defines clear responsibilities and commitments for Continental as well as all its suppliers and service providers along the entire natural rubber value chain. The aim is to minimise environmental, human-rights and social risks.
Both the BMZ and Continental are members of the Global Platform for Sustainable Natural Rubber (GPSNR), which was founded in March 2019, a merger of the most important players in the natural rubber sector from the economy and civil society. Together with other members, they are working on the global improvement of sustainability in the natural rubber sector. Both Continental and the BMZ aim to promptly consider the guidelines for greater sustainability in the natural rubber sector elaborated here in their projects in Indonesia.