In tobacco farming
For its production of smokefree products and cigars, Swedish Match does not source tobacco directly from tobacco farms. Instead, the Company relies on large, reputable international leaf tobacco suppliers. Significant tobacco suppliers must be able to provide Swedish Match with documentation of their own regulatory framework and activities related to social and environmental issues, including their policies with regard to farming practices. These suppliers are also encouraged to grow tobacco according to Good Agricultural Practice (GAP) guidelines which aim at ensuring responsible and economically viable production of usable tobacco. This implies producing a quality tobacco crop while protecting, sustaining or enhancing the environment with regard to soil, water, and air as well as animal and plant life.
Timber sourcing and forestry is an important area for the Group as Swedish Match sources wood and maintains plantations for use in its match production. Swedish Match uses aspen, pine, and poplar, and sourcing takes place near production, primarily from sources in Sweden and Brazil. All sourcing must be from timber that meets or exceeds the minimum requirements of government regulations.
In Sweden, Swedish Match uses aspen wood for the manufacturing of matches. The wood is mainly sourced from the southern part of Sweden (Götaland and Svealand, excluding the northwest of Dalarna). The largest volumes are purchased through large wood suppliers, such as “Södra” and “Mellanskog”. Smaller volumes of wood are sourced directly from individual forest owners.
The Company uses approximately 25,000 m3 of aspen wood per year. Aspen grows naturally together with other kinds of wood and the cutting is often done where spruce is planted. All cutting of wood must be performed according to the Swedish forestry law and all final cutting of wood above an area of 0.5 hectares must be reported to the Swedish Forest Agency.
Swedish Match Industries AB, the Company’s entity which produces match products in Sweden, is since 2009 certified according to the FSCTM chain of custody standard and the standard for controlled wood. The main advantage of a multi-site chain of custody certificate is that the sales companies and agents will be allowed to promote FSCTM.
In Brazil, more than 95 percent of Swedish Match’s wood consumption comes from the Company’s own plantations. The remaining small volume is bought from well reputed companies in Brazil. Swedish Match owns approximately 5,800 hectares of planted forests in two different reforestation projects in Brazil:
- The pine reforestation project is scattered around five farms in the Paraná state in the south of Brazil. It covers approximately 3,300 hectares of Pinus elliottii forests and nearly 3.4 million trees. The forest has a 25 year rotation period.
- The poplar reforestation project is carried out in six farm groups in the south of the Paraná state and in the north of the Santa Catarina state. Approximately 2,500 hectares are covered with 800,000 poplar trees, in places where the specie has shown good adaptation. The aim has been to obtain high quality matches by overcoming difficulties concerned within pine wood splint production and the use restraints imposed to Paraná pine wood. The poplar reforestation project is a pioneer project and Swedish Match has been working for 20 years to find out the best methods and forest management systems from nursery to harvest.
The main goal of the reforestation projects is to supply wood for safety matches and match box production in a self-sufficient manner.
The Company harvests and plants close to 420 hectares annually, representing more than 300,000 seedlings every year. In the combined area of all the plantations, 20 percent of the area remains untouched for the preservation of native forest. This is in accordance with Brazilian legislation, which is extensive and rigorous. In addition, areas adjacent to rivers are protected in accordance with the Permanent Protection law of Brazil.
Some examples of environmental monitoring and control as well as biodiversity initiatives in Brazil:
- For all pest and disease controls, only materials approved by Brazilian authorities are used. Swedish Match has constantly strived to replace traditional pesticides in favor of more environmentally friendly natural biological means of control.
- Water quality in rivers inside and adjacent to plantations is monitored upstream and downstream. Until now, no toxic residuals have been identified which confirms that there is no water contamination detected.
- In the control of weeds, the use of herbicides has been partially replaced by winter intercropping (Lolium multiflorum) as natural weed control. Lolium multiflorum is sown in the forest to obtain a dead vegetal coverage on the soil at the beginning of summertime, which helps to avoid weed that compete with poplar for water and nutrients. It also promotes nutrient cycling, improves moisture and soil aeration, and protects from soil erosion. The most important benefit is the significant reduction of herbicide utilization, thus becoming an environmentally friendly practice.
- Swedish Match’s Brazilian operations are currently entering into a process of obtaining an Environmental Operational License to be issued by the State of Santa Catarina, where parts of the Company’s plantations are located. Swedish Match is one of the first companies to work towards obtaining this license. The Company expects to obtain this license, which initially will be valid for a period of four years, during 2013.
Other improvements under implementation include mechanization of forest harvest and forest management in both the pine and poplar projects. Further, a new fertilization program is being developed for poplar forests, aiming to optimize forest growth while respecting the environment.