APRIL Statement on Tax Affairs and Pulp Shipments to China
APRIL offers the below statement regarding speculation in a recent report published by Forum Pajak Berkeadilan (Tax Justice Forum), and repeated in a media story, on the company’s management of its tax affairs and past pulp shipments to China.
APRIL is a privately held company and does not disclose financial or commercially sensitive information. We can confirm that all export activities and tax arrangements comply with national and international laws and regulations. As a global company that holds a significant market position, we subject ourselves to independent financial audits and various other forms of business scrutiny, internally and externally, as part of a strong governance framework.
PT. Riau Andalan Pulp and Paper (PT. RAPP), the operating arm of APRIL Group, collaborated with Sateri between 2016 and 2018 to trial and jointly develop a modified Acacia Eucalyptus Kraft pulp (AE Pulp), by means of a new technology, for use as viscose staple fiber. The trial involved Sateri blending AE pulp in small, controlled quantities in their manufacturing process. This two-year trial period is a standard practice for innovations of this kind, noting it is the first time anywhere in the world that viscose staple fiber has been produced using Acacia Crassicarpa. This process is now registered and protected as intellectual property.
As this was a trial, the AE Pulp was exported under the HSCode Kraft or HSCode 4703.290000. Our export price reflected the fact that this was an experimental product and did not yet meet the full technical specifications of Dissolving Pulp. At the successful conclusion of the development process in late 2018, the modified AE Pulp fully met Sateri’s standards for commercial production. It was then exported under the HSCode Dissolving Pulp or HSCode 4702.000000 and priced according to market benchmark.
We work with market affiliates, along with a range of other service providers, where we require access to expertise beyond our core capabilities as a manufacturer of bio-based products from renewable fiber. Product pricing in any given period is set in accordance with market prices in the respective export destinations. We are fully committed to complying with the laws and regulations in all locations where we operate and would strongly reject any suggestion that APRIL has engaged in ‘profit shifting’.