SIPITANG: A RM1.2 billion takeover has saved the jobs of about 1,500 workers at ailing India-owned pulp and paper mill Sabah Forest Industries Sdn Bhd here.
The takeover by Pelangi Prestasi Sdn Bhd entails the transfer of all SFI assets, land titles and timber licences and is made possible by strong support of the Sabah state government.
The takeover was announced by the Sabah Chief Minister Tan Sri Musa Aman at an event organised by Yayasan Sabah at the Esplanade, Sipitang this morning.
The Sabah government has been proactive in resolving the issue by looking for suitable investors to take over SFI, which was owned by India-based Ballarpur Industries Ltd.
“The move is seen as a good example of smart government-private sector partnership that will bring mutual benefits to all parties involved, particularly the community in Sipitang.
“To the people of Sipitang, SFI is not just another company operating in the area but also serves as the economic back-bone to the community there, where its closure could certainly have an adverse effect on the livelihood of the people,” said Musa.
SFI is one of Malaysia’s largest timber growers and wood processors.
It reportedly manages a forest estate totaling 288,000 hectares, pulp and paper manufacturing facilities, and an integrated timber complex consisting of a saw mill and a veneer and plywood factory.
Ballarpur acquired Sabah Forest in 2007, marking the first overseas acquisition by an Indian paper company.
The takeover is targeted to be completed by end of this year.
While the exercise will retain all SFI workforce, Pelangi Prestasi has also given its commitment to undertaking workers’ back-wages, providing training and support as well as enhancing access to basic amenities.
The workers are currently under the temporary layoff scheme since early this year.
The exercise is also expected to contribute further to the local socio-economic development via creation of about 3,000 employment opportunities and other economic spill-over effects.
Upon completion of the takeover, the new owner plans to restart SFI’s pulp and paper mill operations.
For the next five years, it will focus on sustainable development of the forest concession area to maximise value through integrated processing and diversification of products.