The recent announcement that Jackson Wijaya, founder of Paper Excellence (now Domtar) will assume full control of Asia Pulp & Paper (APP) has reignited the controversy over the connections between the two.
Jackson WijayaIn mid-November, EUWID Pulp and Paper reported that the Directorate-General for the Competition of the European Commission has been notified that Jackson Wijaya Limantara, owner of the Paper Excellence Group, would assume sole control of the APP group of companies from his father, Teguh Ganda Wijaya (also known as Oei Tjie Goan).
In late October, it was announced that the company would rebrand as Domtar, integrating the operations of Resolute Forest Products, Paper Excellence and Domtar in North America. Combined, the company has 14,000 employees and produces 9.1 million t/y of pulp, paper, packaging and tissue along with 3 billion board feet of lumber across 60 locations in North America. Corporate offices are situated in the US and Canada.
Although APP and Domtar have long claimed the two companies operated independently of each other, the November announcement of the transfer prompted many to re-question these assertions.
Much of the concern has centered around two issues: APP’s poor environmental record and foreign control of million of hectares of Canadian forest lands.
As reported by Stefan Labbé in BIV (Business in Vancouver), Priyanka Vittal, legal counsel for Greenpeace Canada, said “It’s a concern to us that they were denying it, and ultimately, it’s proven to be true.”
However, Jennifer Johnson, vice president of global communications for Domtar, said the move was simply part of the elder Wijaya’s normal course succession planning. She stressed that Jackson has no intention of taking his father’s position overseeing APP. “Importantly, Mr. Wijaya will not hold any leadership position within APP, and APP and Domtar will continue to operate as they always have: as distinct entities, each with its own management teams and governance structures.”
According to Domtar, any engagement with APP will occur at “arm’s length”. In its latest release, the company did not pull any punches in addressing the controversy. “…. Jackson’s inheriting APP shares has no impact whatsoever on Domtar and any suggestion to the contrary is ill-informed and patently false.”
It seems there is little the Canadian government can do, even if it wanted to. As it is a separate legal entity from Domtar and headquartered in China and Indonesia, any change in APP’s ownership is not subject to the Investment Canada Act.
Also, in hearings before the Canadian Standing Committee on Natural Resources, Domtar said it was not looking to increase pulp sales to China or shift production there, calling the suggestion “unfounded and economically unfeasible.”
Graeme Rodden has covered the pulp and paper industry for more than 40 years, including serving as editor of several well-known paper industry magazines.
