ITOCHU is building a natural rubber and tire value chain that has as its core P.T. ANEKA BUMI PRATAMA (ABP), which is an Indonesian natural rubber processing company located upstream in the value chain, and European Tyre Enterprise Limited (ETEL), which operates the United Kingdom’s largest tire retail chain Kwik-Fit and other businesses in the downstream industry. By promoting business transformation both upstream and downstream in the value chain, we continue to sustainably enhance corporate value and contribute to the realization of the SDGs across the entire natural rubber and tire industry.

Around 70% of the natural rubber consumed around the world is used for tires. Going forward, demand for this natural resource is only expected to steadily increase. On the other hand, with approximately 85% of production reliant on smallholders, especially in Southeast Asia, we urgently need to address the social issues of deforestation as well as poverty and human rights violations affecting the farmers. As one measure to solve these issues, ITOCHU launched “PROJECT TREE,” which aims to realize the traceability and sustainability of natural rubber and is working hard to garner greater support for the project.

For the natural rubber procured by ABP, we established traceability from production to processing by utilizing blockchain technology to prevent data falsification. Coupled with the unique social contribution activity of “PROJECT TREE,” we enabled the construction of a platform that ensures the supplied natural rubber has a low risk of violations, for example, involving illegal logging or human rights. A portion of sales of premium tires, which boast the added value of traceability, will be returned to suppliers such as smallholders of natural rubber. This will, in turn, enhance sustainability throughout the natural rubber industry. This is one specific example of our social contribution activities. Amid the rush and urgency to address social issues, major tire manufacturers are lining up to support this initiative, which is deeply enmeshed in the upstream portion of the supply chain. They have already begun selling tires made from natural rubber procured with this platform. An important role for promoting this initiative is played by ETEL, with its customer contact points as a retailer for tire manufacturers.

ETEL owns the tire retail business Kwik-Fit and operates businesses that serve the consumer needs and society at its approximately 700 stores in the United Kingdom, a nation that leads in environmental awareness. In December 2021, ETEL acquired Murfitts Group Ltd, which is the largest post-consumer car tires recycling business in the United Kingdom. This acquisition expanded ETEL’s business field into the recycling of postconsumer car tires. The Group is building a more effective logistics network through collaboration with the existing businesses of ETEL, which boasts a tire logistics network spanning the entire United Kingdom. ITOCHU aims to realize a circular economy by striving to develop and commercialize proprietary cracking technologies for carbon black, which is a raw material for tires, in addition to processing and selling asphalt alternative products made from post-consumer car tires.

By developing a new natural rubber sales platform and working to reinforce the tire business value chain— encompassing wholesale, retail, and collection—we will continue striving to both help realize a circular economy and sustainably enhance corporate value.