China unveils hug Malaysia investment

China unveils hug Malaysia investment

KUALA LUMPUR (AP): China announced yesterday it would
establish its largest foreign investment project in Malaysia,
signing a joint venture to build a pulp and paper mill on Borneo.

A statement issued at the signing of the 4.3 billion ringgit
(US$1.6 billion) project in the presence of Chinese Premier Li
Peng and Malaysian Prime Minister Mahathir Mohamad said the
project "represented the single largest foreign investment by the
(People's Republic of China) outside their country."

The joint venture was signed between the Lion Group of
Malaysia and China Pulp and Paper Industry Co. Ltd for the plant
to be built in Sabah state on Borneo island.

The project will produce 750,000 tons of pulp and 225,000 tons
of paper annually. A substantial portion will be exported to
China, generating annual earnings and savings of more than 1
billion ringgit ($3.7 million) for Malaysia, the statement said.
It will provide 6,500 jobs, including 200 managerial and
technical positions.

The project will have its own sustainable forest management
program which will include converting and rehabilitating waste
and idle land into productive forest plantation, the statement
said.

About 220,000 hectares of forest plantation will be developed
with an annual production of 3.8 million cubic meters of pulp
wood to feed the pulp mill.

Two companies will be created in Malaysia to undertake the
forest plantation project and the paper mill. The company for the
plantation project will have an equity structure of 60 percent
Malaysia and 40 percent China while the company for the paper
mill will have an equity structure of 60 percent China and 40
percent Malaysia.

The partners are also looking into other possible sites in
Malaysia to establish another pulp and paper mill of similar
capacity.