ITC Paperboards and Specialty Papers Division - With forestry, ITC has linked CSR to biz - Financial Express

With forestry, ITC has linked CSR to biz - Financial Express

Sep 07 2011

With forestry, ITC has linked CSR to biz



Sandip Das


Paper manufacturing major ITC has created more than 1.15 lakh hectare of forest cover through social and farm-forestry initiatives in the last one decade and sources all its wood requirements from these forests. With rising demand of paper and paper products, demand for wood pulp is rising steadily and ITC has planned to create more forest cover in the next few years. In an interview to FE’s Sandip Das, divisional chief executive of ITC’s paperboards & specialty papers division Sanjay K Singh elaborates the company’s contribution towards increasing green cover.


How do you deal with farmers on growing Eucalyptus trees?


The cost of growing plantations was Rs. 15,000 – 20,000 per acre, ITC invested the entire amount (estimated to be Rs. 2,000 crore) initially. After four years, we have started to buy back the wood pulp. Farmers kept aside a portion of their earnings in a separate community fund for development of village infrastructure like roads and schools. With the rest, the farmers try to buy more land. The key is that we have linked our Corporate Social Responsibility (CSR) to our business. It has become sustainable because, it is linked to business. It’s a win-win for the business and farmers.


Our forestry programme is divided into social and farm forestry. In case of farm forestry, farmers put in their own money, which we do not subsidise while we provide only inputs. Farmers buy high-yielding clones or saplings from us. But as part of CSR, we are giving the saplings free to poor and tribal farmers. Out of 1.15-lakh hectare, about 20,000 hectare would be social forestry and rest would be farm forestry.


How did the forestry programme evolve?


Seeing the benefit of the scheme, then the government started to develop fields through resources from National Rural Employee Guarantee Act (NREGA) programme, watershed programme and state government tribal development scheme. Then we started providing only the saplings to farmers. The government took up the cost of developing the field. The key for the forestry scheme was that market was readily available. The biggest drawback for poor farmers was marketing. Now the contractors would come and the rate is fixed for the tree so that nobody tries to cheat them. The entire wood is brought for our paper mill located at Bhadrachalam in Andhra Pradesh. The farmers’ field was earlier barren. We provided technical advise and assured them we will buy the wood.



What was the impact of the social forestry programme?


The initiative also indirectly increases the country’s forest cover. It helps in recharging ground water. It has also discouraged people from going to forest for fuel woods. Lots of fuel supplies in villages come from these trees. At present, all the wood requirement for the paper manufacturing comes from our forestry scheme. Not a single piece of wood from the natural forest. For the existing pulp mill we need about 9 lakh tonne of wood annually. In a four-year cycle we need only 40,000 hectare and we have already created 1.15-lakh hectare. Every year we will grow an additional 10,000-hectare of forest. Besides Andhra Pradesh, we have taken up forestry programme in Madhya Pradesh and Maharashtra. Now, we are helping farmers in Tamil Nadu too.


How do you intend to meet the rising demand of paper?


As against 8-9 kg per head per annum of paper consumption at present in the country, China's per capita consumption is at 45 kg per head per annum. It’s a cyclic business. The demand for paper would be rising in coming years. We are going to put up another pulp mill in Bhadrachalam. We are preparing for an investment of Rs. 3,000 crore in another three or four years. We need wood for the new plant.


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