Foreign group to build $1.4b pulp mill in Malaysia
Foreign group to build $1.4b pulp mill in Malaysia
KUALA LUMPUR (AFP): A subsidiary of Malaysia's Ekran Bhd. has picked a foreign consortium to build its proposed 3.5-billion ringgit ( US$1. 4 billion) pulp and paper mill, a report said yesterday.
The agreement will be signed next month with the group, comprising companies from the United States, Brazil and Europe, Ekran executive chairman Ting Pek Khiing was quoted as saying.
"The consortium will be responsible for commissioning and operating the plant," The Star newspaper quoted him as saying.
The plant would be based in Bintulu, in resource-rich eastern Sarawak state.
The foreign consortium had "undertaken many projects in other countries such as Indonesia," he said, adding that the name of the group will be announced later.
The project developer, Sarawak Pulp and Paper Mill Sdn. Bhd., is wholly owned by Ekran's listed subsidiary, PWE Industries Bhd., following the pullout of Indonesian conglomerate RGM International.
RGM International had previously held a 55 percent equity stake in Sarawak Pulp and Paper Mill and PWE the remaining 45 percent stake.
"The project is now 100 percent owned by PWE. Construction will start in early January," Ting said.
"From my experience with Bakun (a massive hydroelectric dam project in Malaysia), I think it is better for such an undertaking to be handled by only one company," he added.
Ting said the mill will be commissioned in the last quarter of 1998, with raw material coming from trees to be felled at the Bakun dam project, 100 kilometers (68 miles) from Bintulu, a coastal town in Sarawak.
Ting's Ekran holds a controlling 32-percent stake in Bakun Hydroelectric Corp. Bhd., the developer of the 13.6-billion- ringgit dam in Sarawak. Work on the dam started on December 1 and is scheduled to be completed by 2003.
About 1.5 million tons of wood will be needed to produce 1.2 million tons of pulp annually, Ting said.
Ting said the company had found buyers for the produce over the next 10 years. "We expect to record 1.5 billion ringgit in sales per year," he added.
Ekran stock was 30 sen lower at 10.20 ringgit while PWE Industries dropped 25 sen to 37.75 ringgit in late morning trading on the local bourse Friday.