(From left) Xiamen C&D Paper & Pulp Group Co Ltd general manager Zhang Xiao Hui, Nextgreen Global Bhd managing director Datuk Lim Thiam Huat, IOI Corp Bhd group managing director and chief executive Datuk Lee Yeow Chor at the joint venture agreement signing ceremony to spearhead the development of a high capacity, bio-integrated pulp production facility at the Green Technology Park in Pekan, Pahang.
PUTRAJAYA: Green technology company Nextgreen Global Bhd
is optimistic that its joint venture (JV) with Xiamen C&D Paper & Pulp Group Co Ltd of China to set up a paper pulp plant will progress well, underpinned by strong demand for sustainable pulp and strategic government backing.
Nextgreen Global first announced its plan to form a JV with Xiamen C&D last April.
Back then, Nextgreen IOI Pulp Sdn Bhd (NIP), a 55:45 JV between Nextgreen Global and IOI Corp Bhd, had signed a memorandum of understanding with Xiamen C&D to jointly develop a paper pulp production facility at the Green Technology Park in Pekan, Pahang.
The JV agreement inked yesterday between Xiamen C&D’s wholly owned subsidiary, Hong Kong Paper Sources Co Ltd, and NIP further cements the initiative.
Under the agreement, NIP will hold a 75% stake in the new JV, while Xiamen C&D will hold the remaining 25%.
The new entity is expected to be established within 10 business days from yesterday to spearhead the development of the paper pulp plant.
Xiamen C&D is a Fortune Global 500 company and a leading professional supply chain operator for forest pulp and paper in China.
IOI Corp group managing director and chief executive Datuk Lee Yeow Chor said the JV aligns with the country’s aspirations outlined in the National Biomass Action Plan that was released two years ago.
“Palm oil is a key industry in Malaysia and the government has long focused on the annual generation of empty fruit bunches (EFB), which amounts to about 50 million to 60 million tonnes a year.
“The government has always had the ambition to utilise this bio-waste more effectively, and EFB utilisation and conversion into paper pulp is one of the important focus areas under the National Biomass Action Plan,” Lee told the media during the signing of the agreement yesterday.
The facility to be developed on 81 acres of land within the technology park is targeted for completion within 24 months and will utilise Malaysia’s abundant palm biomass, specifically EFB, to produce high-quality pulp.
The first phase, which is expected to be completed in 2027, will see 150,000 tonnes of pulp being produced annually.
It entails an estimated capital expenditure (capex) of RM900mil.
This is a step up from Nextgreen Global’s initial projections which targeted a production capacity of 100,000 tonnes in the first phase with a cost of RM600mil.
Meanwhile, the second phase will add another 300,000 tonnes to the plant’s production capacity, boosting annual production to 450,000 tonnes.
It is expected to be completed by 2028 or 2029 with a projected capex of RM1.8bil.
Xiamen C&D general manager Zhang Xiao Hui said it is expected to take about three years for the plant to hit the 450,000-tonne target.
“The construction of the second phase will overlap with the first.
“If production in the first phase is successful, we estimate that it will take a little over a year to complete the second phase,” Zhang said.
Nextgreen Global will contribute technology and expertise using its patented Preconditioning Refiner Chemical-Recycle Bleached Mechanised Pulp technology, while Xiamen C&D will take the lead in product distribution.
Zhang added that Xiamen C&D is expected to play a major role in the project, specifically as the exclusive distributor.
The company will be responsible for pricing as well as the promotion and sales of the product in the market.
“We will leverage our strong network and customer resource advantages in the Chinese market to ensure the smooth sales of the product.
“Currently, China imports over 33 million tonnes of pulp annually.
“Each year, with the development of China’s economy, the volume is also increasing,” Zhang said.
