PETALING JAYA: Nextgreen Global Bhd (NGGB) has partnered with IOI Corp Bhd ’s unit, IOI Paper Pulp Sdn Bhd, to establish Malaysia’s first large-scale zero-waste paper pulp plant, which is projected to yield about RM300mil in revenue by 2026.
Located within NGGB’s 410-acre Green Technology Park in Pekan, Pahang, the initiative is expected to cost an investment of about RM600mil.
This partnership will see the establishment of Nextgreen IOI Pulp Sdn Bhd (NIP) with NGGB holding a 55% stake and IOI holding the remaining 45%.
The cost of constructing the paper pulp plant will also be divided based on each party’s stake in the company.
NIP will develop and operate a paper pulp production facility, which will have an initial capacity of 100,000 tonnes of chemical bleached pulp per annum made from oil palm empty fruit bunches (EFB), utilising NGGB’s patented pre-conditioning refiner chemical-recycle bleached mechanised pulp technology.
This development is expected to take place over the next 18 to 24 months.
NGGB managing director Datuk Lim Thiam Huat said the group has secured a customer from Japan for the entire 100,000 tonnes of paper pulp, with a letter of intent (LoI) obtained in September 2023.
“We have actually gotten the LoI from Marubeni, the Japanese conglomerate, for the paper pulp offtaker.
“At the same time, this will not limit us from going further to engage with customers from China as well,” he told a press conference following the signing ceremony. Looking ahead, Lim said NGGB has plans to construct an additional 100,000-tonne plant and another 200,000-tonne plant, bringing the total capacity to 400,000 tonnes within the vicinity.
“Pulp has become one of our core businesses. I think this is the direction the company is heading,” he added.
Meanwhile, IOI group managing director and chief executive officer Datuk Lee Yeow Chor welcomed the partnership, leveraging NGGB’s technology in EFB utilisation, having already set up a commercial plant with a capacity of 10,000 tonnes of paper pulp.
“We think this is a very scalable venture. The first base will be in Pahang, but, after that, we believe we can replicate similar factories to be set up in Sabah and Sarawak,” he said.
When asked if all of IOI’s EFB waste would go to the new plant, Lee clarified that only some would, as the demand for the raw materials is substantial.
He said relying solely on IOI’s EFB would not be sufficient, as the plant requires EFB from other palm oil players as well.
Meanwhile, Lim said this initiative is interconnected with the oil palm biomass collection and processing centre (CPC), as outlined in the National Biomass Action Plan 2023-2030 launched on Dec 7, 2023.
“The CPC, endorsed by the Plantation and Commodities Ministry will be one of the key elements for this plant,” he said, adding that the group plans to establish 20 CPCs across the country to source raw materials.
On the palm oil price outlook, Lee attributed the significant surge in prices since early March, reaching the RM4,500 level per tonne, to people’s expectation of El Nino restricting palm oil production.
He said this would be a temporary phenomenon, with production expected to normalise from June onwards.
“When palm oil production increases, prices may moderate slightly, but remain at a strong level,” he said.
NGGB and IOI expected the new plant, would not only revolutionise paper production but also address the challenge of agricultural waste management.
The objective of the collaboration is to ensure that agricultural waste like EFB, a biomass by-product waste from oil palm industries which is typically unutilised, is transformed into green and sustainable products such as woodfree paper, tissue paper, premium packaging paper and pulp moulded packaging.