GSG Industries: Smoothening Out Environmental Wrinkles

Paper. Perhaps the most versatile material ever created by man. And depending on how it is used, it becomes one of the most highly prized products on earth.

Take the case of the Crane paper company in the United States. For over a hundred years, this company has been supplying the United States government with the special paper used to make official dollar bills. As the president of the company once jokingly remarked in an interview, “it is remarkable how, out of virtually worthless materials, we have managed to create something that is highly prized and sought after the world over!”

Paper is truly remarkable. The basic process of making paper was invented by the Chinese Ts’ai Lun in 104 A.D. during the Han Dynasty, and has undergone little change since then. However, with the different uses of paper, raw materials, its preparation and additives have changed according to end use.

With the very high demand for paper, its manufacture is a big industry worldwide. The pulp and paper industry profits billions of dollars, but a high social cost. Through the world, paper manufacturers have been blamed for the depletion of boreal and tropical forests, as well as pollution through runoff of untreated water into the environment.

In the Philippines alone, it was estimated in 1992 by the Department of Environment and Natural Resources’ Environmental Management Bureau (DENR-EMB) that the health damages arising from water pollution by Philippine industries amounted to more than 500 million pesos (includes cost of medication, foregone earnings from lost working days and lost earnings from premature death). In terms of earnings from fisheries, the EMB estimated that potentially almost 800 million pesos was lost.

In response to these alarming figures, the DENR, with the cooperation of foreign aid agencies, NGOs and other associations, launched a pollution reduction initiative involving volunteer companies. More than 100 companies have participated in the program. One of them is GSG Industries.

GSG Industries is a Filipino enterprise that specializes in the manufacture of handmade paper from natural, Philippine-fiber pulp. In the case of GSG, it is a flourishing business that has grown from seeds sown in childhood play and a summertime hobby.

“The children of Geoffrey S. Gonzales (GSG founder and Chief Executive Officer) and I practically grew up together and have remained close friends even into adulthood,” relates Chai C. Santos, Export Officer of GSG Industries. “It was in the mid 80s when we got our first introduction to handmade paper, and as members of a neighborhood arts club, we experimented with making handmade paper from cogon that grew profusely around us.” GSG Industries, the handmade paper company, was established in serendipitous circumstances. In the late 80s, Engr. Geoffrey S. Gonzales and his architect-daughter were in the business of design and building construction, and one of their projects took them to Legaspi City, Albay in the Bicol Region. Frustrated by the fact that while there was much raw lumber to be sourced in the region, but not the treated variety – and having found the provincial setting in which to set up his small retirement business – Geoffrey Gonzales decided to set up a lumber processing plant in the region. With earnings from his Legaspi City project, he soon found a place to set up his kiln-drying plant.

The processing plant was halfway to completion when the Total Log Ban law was effected – completely eradicating the very premise which the plant was built upon. There was no choice but to scrap Plan A and find a quick turn-around to Plan B, otherwise all improvements to the plant-in-progress would be rendered useless.

Luckily, one of Geoffrey Gonzales’ sons, artist Tony, was working as a product designer at an export company that produced paper-based gifts items, boxes and papier mache. It was Tony who suggested the alternative Plan B, reminded his Dad about the family’s backyard paper making activity a few years back, and gave a glowing forecast of handmade paper’s potential in the global market.

Thus, GSG Industries was born. Km. 536, Arimbay, Legaspi City, was found to be an ideal location for paper-making. Situated just below the slopes of Mayon Volcano, it had access to mountain spring water – pure and clean water being a significant requirement for papermaking. Abaca, which is the main base pulp of handmade paper product, is abundant and accessible, with Bicol Region being an “abaca country.” Then, there was also the easy access to cellulosic farm waste from nearby farming communities, from which natural elements came the rich textures that gave GSG handmade paper its main design substance and unique, trendsetting appeal. Finally, as a way of giving back something to the community where the mill now belongs to, this labor-intensive business provided livelihood opportunities for many members of surrounding communities.

“Our process of making paper does not differ much from the basic handmade paper making method introduced by the Chinese and perfected by the Japanese many centuries ago. The basic sheet forming procedures are still done in the traditional Oriental method, with each piece of paper individually created by using a bamboo mould and deckle. However, to this traditional method, we have added semi-mechanized production process, especially those of the support functions to the actual handmade sheet forming procedures. Geoffrey Gonzales is a mechanical engineer, and he loves to design and fabricate his own machinery and equipment. This hobby has served him in good stead in his business. Because we cannot afford the exorbitant costs of brand new equipment, he fabricates his own. With these machines, we have eliminated production bottlenecks in some important parts of production process. What took a 5-hour cooking time for fiber is now a shorter 2-hour procedure. We have our in-house designed and fabricated hollander beater for preparing our own pulp for making paper. And, instead of doing the traditional sun or air-drying method for papers, we dry our paper sheets on stainless steel plates heated from a mechanical steam boiler. The papers are still dried manually, but the paper drying time has been dramatically reduced. From drying each sheet in 2-3 hours, our papers are dried within five minutes. So as you can see, semi-mechanization of the support processes in handmade papermaking has really given us optimum production efficiency,” Chai Santos explains.

Within six months of building the paper mill, while simultaneously training the workers in handmade papermaking and drying skills, and doing intensive research and product development, GSG Industries was formally inaugurated in August 1991 and in the following month, debuted in the National Handmade Paper Show organized by Department of Trade and Industry (DTI) and Center for International Trade Exhibitions and Missions (CITEM). In that fair, the orders came pouring in, from many exporters of paper-based gifts and tabletop accessory items. In the following year, with many local exporters as their main buyers, GSG Industries further honed their collective skills and continued on with intensive product research as well as production efficiency development.

After a year of exposure to exports (through their being indirect suppliers to exporters), GSG Industries took up the challenge for the Philippine handmade paper industry by deciding to join the prestigious Premiere Paperworld Fair 1993 in Frankfurt, Germany. “Under the support of DTI/CITEM, the company decided to bring their handmade papers to the attention of the world market, in the world’s biggest sales venue for paper and paper products. The test was in bringing merely papers to the Premiere Fair and find out if paper as paper – and not paper with the added value of it being converted into real products – can sell as a product by itself. The challenge was not merely for the company, but for the rest of the Filipino handmade paper makers as well, and this debut was nothing short of sensational, with buyers queueing up at the GSG booth throughout the 5-day fair,” Ms. Santos reports.

The answer was clear: Philippine handmade paper is a highly marketable product in itself, and the rest, as the cliche; goes, is history. That experience in the Frankfurt fair was the beginning for the GSG Industries export business, as well as paved the way for other Filipino paper-makers to the export arena. Since that time until today, the company has remained a market leader in the Philippine handmade paper industry, and has been considered the biggest handmade paper mill in the Philippines. The company has also gained recognition for its trendsetting designs and innovations. It garnered various awards like Katha Awards (for Best Booth and Product Designs and a special “Ecology Citation”) in their participation in the Manila FAME International Buyers Market Weeks. In 1996, five years after their entry into the handmade paper industry, GSG Industries was also awarded the coveted Philippine Exporters’ Golden Shell Award for Design Excellence.

The GSG Industries handmade papers are designed to celebrate the Filipino soul, by using natural materials that are inherently and uniquely Filipino. Its main pulp base is abaca, a natural Filipino fiber that holds the distinction of being one of the strongest fibers in the world. And flaunting the country’s wealth of natural materials, GSG Industries handmade papers makes use of the rich trove of materials available in our Philippine countryside – mostly cellulosic agricultural waste as rice husk and rice hull, coconut coir, banana, nipa and palm, water lily, leaves, flowers and grass. One of the company’s best selling paper designs features discarded shells from edible mollusks and fish scales. GSG uses industrial food-grade dyes as coloring agents and tapioca (cassava starch) as binder.

“GSG Industries handmade papers do not use wood pulp in any form, and instead advocate the use of highly replenishable, renewable, therefore ecologically-responsible natural Philippine fibers,” says Chai Santos.

In 1996, GSG Industries volunteered to be one of the participants in a USAID-funded DENR study to recommend lowcost/no-cost environmental protection program for selected industries, one of which was for pulp and paper. Following this program, the company instituted environmental protection reforms within its paper mill and set to follow the best-practice recommendations of the study.

The company has since been given the DENR-EMB Environment Compliance Certificate (ECC), a permit which is regularly checked for compliance. Non-compliance of the DENR procedures will result in fines, or worse, a revocation of permit and closure of operations. Thus the paper mill operates within the guidelines set by DENR and upholds the religious implementation of DENR procedures, and makes the periodic DENR reports. To perform all these requirements, the company employs an in-house Environmental Protection Officer. Handmade paper manufacturing uses up a lot of water. For the company’s daily production volume of 1000 wrapping paper sheets (size 66x91cm), 150 long pulp sheets (size 70x240cm) and 40,000 blank cards (average size 20x30cm), more than 1,000 liters of water is needed daily. To eliminate the threat of contaminated water run-off, Geoffrey Gonzales has set up a system where all excess water squeezed out of the handmade paper production is run though numerous water filter stops, until finally reaching an aeration chamber to filter out the last of the impurities, ensuring only clean water running off the last effluent pipe. This system, which Geoffrey Gonzales himself designed, has been modified further following the additional recommendations set by the USAID/DENR study.

True to their goals of minimum-to-zero waste, GSG collects escaped pulp bits from the water filter stops and re-uses these in paper production. Even paper trimmed from finished cards and production over-runs can be re-pulped again to make new paper!

Ms. Santos further explains that this environmental protection has actually been a source of cost savings realized from the recovery and recycling of materials. The GSG Industries handmade paper mill operates on a very “familial” environment, with Geoffrey S. Gonzales as the benevolent head of the family. Management and workers are proud of their collective achievement and look forward to a mutually prosperous future, with everyone sharing the fruits of their labor in more ways than merely having the normal management-worker relationship.

At present, the company employs some 150 workers in its operations, maintenance and production. Employees work with regular wages plus incentive package. The card making production group is in the hands of a cooperative, where the workers are empowered to set their own goals for production and financial remuneration. The management provides a clean, safe and healthy working environment, and the workers cooperate to maintain their work places in this condition. Employees are trained to work in the 5S and other best practice management systems. The workers also tend to a portion of the company land allocated for growing vegetables and fruits, and the harvest is shared and enjoyed by everyone.

Chai Santos concludes: “The buyers of GSG Industries handmade papers keep coming back to us because they put a premium on the creativity of our products. They also put premium on the fact that we are a company who value our workers, and work together to help preserve our environment. The GSG Industries handmade papers rely on the wealth of our natural resources, indeed, the very reason for which we exist. It is only right that we give back to Mother Nature our commitment to its protection and renewal that she richly deserves.”