- Sabah Forest Industries (SFI) now owned by a Malaya-based company Pandawa Sakti Sdn Bhd, previously owned by Indian company, Ballarpur
Pandawa Sakti Sdn Bhd, an associate of delisted property developer Gula Perak Bhd, appears to be positioning itself as a top Malaysian paper manufacturer with the US$500 million (RM2.2 billion) purchase of a controlling stake in Sabah Forest Industries Sdn Bhd (SFI) from Ballarpur Industries Ltd, the largest pulp and paper mill in the country.
SFI manages a forest estate of 288,138ha, pulp and paper manufacturing facilities, along with an integrated timber complex consisting of a saw mill and a veneer and plywood factory.
The mill is able to produce 240,000 tonnes of pulp a year, half of which is manufactured into writing and printing paper for domestic and international markets, while the other half is exported as market pulp.
Pandawa Sakti’s purchase of SFI comes less than a year following a three-year US$2.66 billion deal with China CEC Engineering Corp to construct a wood pulp factory in Sipitang, Sabah.
The factory is expected to employ a thousand workers and produce one million metric tonnes of wood pulp a year, and will be funded by the Industrial and Commercial Bank of China Ltd, Export Import Bank of China and China Construction Bank Corp.
Ballarpur is India’s largest manufacturer of writing and printing paper and is owned by mega corporation Avantha Group.
It purchased SFI in 2007 for RM945 million cash from the debt-laden Lion Group.
Ballarpur made the divestment seeking to reduce its US$1.55 billion debt and said the sale was in line with the company’s objectives.
While on the surface it appeared that Ballarpur had sold its holdings to Pandawa Sakti at a neat profit, reports suggest the firm had made losses with its SFI acquisition.
It had invested over US$450 million in SFI since 2007. Pandawa Sakti is led by Lim Sue Beng, while Gula Perak was delisted from Bursa Malaysia in 2011.
Lim, a veteran corporate figure, is one of the promoters of the controversial Malaysia-Indonesia bridge planned over the Strait of Malacca and a failed attempt at an urban mass transit system in Malacca.
Instead of a normal bridge, Lim envisioned an undersea tunnel connecting Malacca and Sumatra, at the cost of US$19.3 billion. His plans for a RM1.8 billion “Aerorail” transit system in Malacca and 10 hotels along the track alignment, received backlash from members of the public.
– Bobohizan Press via the Malaysian Reserve.