BILT buys paper mill in Malaysia for $261 mn

Bisheshwar Mishra / TNN / Mar 19, 2007, 23:42 IST

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This is the first overseas integrated paper and pulp facility acquired by an Indian company.

BILT buys paper mill in Malaysia for $261 mn

KOTA KINABALU (MALAYSIA): Friday was a turning point for the Indian paper industry when one of India's leading paper manufacturers, Ballarpur Industries Ltd (BILT), acquired 97.78% of Sabah Forest Industries (SFI), the largest pulp and paper mill in Malaysia.
The value of acquisition made jointly by BILT with the J P Morgan group is estimated at $261 million.
This is the first overseas integrated paper and pulp facility acquired by an Indian company. Taking place at a time when land acquisition by industries in India is embroiled in controversies, the signing ceremony for the transfer of ownership took place between BILT chairman Gautam Thapar and SFI stakeholders in the presence of Sabah state chief minister Musa Ali Aman.
Speaking to reporters, Thapar did voice the sensitive nature of the acquisition of forest land. "We respect and honour this country's laws. We are aware how issues of land are very sensitive in our own country."

He said this was the reason why BILT had gone about the ownership transfer proceedings carefully and in a completely transparent manner.
He said the company's investments here would benefit SFI, the local economy, its people and also help his company expand globally.
His claim was endorsed by Sabah CM Musa Haji Aman, who said, "I am confident that with their background in the field of pulp and paper, BILT would be able to improve the operations of SFI and increase the output of both pulp and paper at the mill. I believe this development will also encourage a host of ancillary industries creating jobs and increasing the income of the people of Sabah."

Of the 13 states of Malaysia, Sabah is the second largest. It is located on the northern portion of the world's third largest island, Borneo. Sabah and its capital, Kota Kinabalu, are separated from the Malaysian mainland and its capital, Kuala Lumpur (KL). The flight time between Kuala Lumpur and Kota Kinabalu is around three hours.
Sabah has one of the world's largest rainforest and timber has been its mainstay. It also has rich resources of palm oil, cocoa and rubber, fisheries and light industries.
The factor which attracted BILT was the trouble-free acquisition of SFI which has a concession for 2,89,000 hectares of forest land from the Sabah government.
The Sabah government leased the forest land to SFI for 99 years from January 1, 1996. Apart form SFI's pulp and paper mill, BILT will benefit from its other assets which include a jetty and a power plant.
(This correspondent was in Malaysia on the invitaion by BILT)

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