SIPITANG: Sabah Forest Industries Sdn Bhd (SFI) today announced a temporary layoff programme involving its 1,350 employees.
The announcement was made at SFI's hall here which was attended by over 1,000 workers.
"The financial strain suffered by SFI has resulted in the company implementing the temporary layoff programme.
"Despite taking several steps to put the operations back to normal, the financial constraints faced proved too difficult to surmount," the SFI statement said, adding that the company had notified Sabah Labour Department about the layoff which is expected to last up to June next year.
The pulp and paper mill operations were severely disrupted when it faced numerous legal proceedings including winding-up petitions.
A team from Grant Thornton was also appointed as Receiver and Manager to obtain restraining orders from the High Court of Sabah and Sarawak.
"It is presently formulating a scheme of arrangement which will be subject to creditor's approval at a later stage.
"Grant Thornton also gave planned steps ahead to resolve the situation via a sale process."
Despite not being in operations, SFI has been paying salaries to its employees.
Affected workers will be paid full salary for next month but reduce to half starting next year.
"Those affected employees are free to work elsewhere during the period and still allowed to stay in the company's housing as before."