One of the biggest challenges in the natural rubber industry is to instill more sustainable practices across a highly fragmented and complex supply chain: 85% of the global natural rubber production originates from smallholder farms with an average surface area of 2 to 3 Ha. bought and sold through the multiple tiers of intermediaries.
In Indonesia and Thailand, it is common for natural rubber processing factories to source raw material through different levels of intermediary dealers. This results in a very complex supply chain, with a single natural rubber processing factory having thousands of smallholder farmers within their supply, having little or no interaction with them.
For several years, Michelin has been working with its suppliers to engage all players in the value chain to adopt best social and environmental practices through a collaborative approach.
Leveraging on a digital solution, RubberWay™ helps to assess and map social and environmental risks. Based on the results of these ESG risk assessments, mitigation actions and capacity building projects are implemented to support smallholder farmers in their sustainability journey.
The ability of smallholders to secure a decent livelihood while practicing good environmental and social practices is key. Farmers often face livelihood challenges, such as limited access to agricultural training, income diversification options, and other soft skills.
The RubberWay™ tool helps the Group to understand better farmers and the specific guidance they need.
Michelin, its subsidiaries and joint ventures in West Africa, Brazil and Indonesia provide around 100,000 smallholder farmers training in agricultural practices.
At the end of 2020, the Group leveraged RubberWay™ findings to launch a project in Sumatra, Indonesia, to empower farmers with tailored training and digital tools.
One of the most important issues is to improve yield per-hectare, a crucial way to reduce land pressure and deforestation risks as demand for natural rubber increases.
Michelin is coupling its risk mapping solution RubberWay™ with a global deforestation risk assessment tool based on satellite data, developed in partnership with WWF France.
With global forests rapidly disappearing, it is critical for the natural rubber industry to move towards zero deforestation practices while avoiding habitat loss for endangered species and preserving biodiversity.