Palm-Based Paper Venture

TAN Sri Vincent Tan Chee Yioun’s privately-owned Eco Palm Paper Sdn Bhd plans to invest as much as RM820 million till 2017 to set up and operate a corrugated paper plant in Pekan, Pahang.

The tycoon owns some 75 per cent of Eco Palm which yesterday signed a contract with China’s Jiangsu Jinwo Machinery Co Ltd for the design, manufacture and commissioning of the palm-based corrugated paper plant.

Tan is banking on Eco Palm’s investment to help bring in as much as RM875 million in sales from 2017 onwards.

The venture is expected to create as many as 2,000 jobs in the state.

Eco Palm’s venture is centred on recycling palm oil empty fruit bunch into corrugated paper.

The plant, located in Kg Tebat in Pekan, Pahang, will be divided into three phases with the aim of having 300,000 metric tonne capacity by the last phase.

Eco Palm’s managing director Larry Yong, Tan’s partner in the venture, said that the production process will see palm oil empty fruit bunches being converted into high-grade packaging paper.

He added that the company’s cost of production per tonne is set to be lower at between RM700 and RM750 as opposed to conventional pulp and paper mills where production cost is between RM1,000 and RM1,200.

Yong also noted that the company has managed to lock in long-term supply of empty fruit bunch at a fixed price.

The first phase of the project has three stages – an integrated fibre plant that can produce high grade fibre for the pulp and paper industry, which has been completed.

The second stage, which is the conversion of fibre into pulp, is scheduled to be completed in 2012.

The final stage, which is the paper production, will commence in 2013. The total investment in the first phase including the RM65 million is RM120 million.

Once this is ready, it will produce 50,000 tonnes per year of packaging grade paper. Returns are expected to take three years.

The plant sits on a 66ha of land and is leased for 60-year period starting 2009 from the Pahang state government.

Eco Palm hopes that it will be able to reduce the negative effects of empty fruit bunches such as burning of boiler fuel or open burning and help reduce the number of trees felled for paper.

The potential export markets for the paper include Australia, Japan and Europe.

Source: Business Times

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