Sabah Chief Minister Musa Aman said the venture was now expected to generate economic spillover worth more than RM6 billion for the state.
In a statement today, he said the benefits would not only be enjoyed by local folks around Sipitang but also people across Sabah.
He said if the company, Malaysia’s largest integrated pulp and paper manufacturer, had downed its shutters, it could have had an adverse impact on the livelihood of many locals.
”To the people of Sipitang, SFI is not just another company operating in the area. It serves as the economic backbone to the community there,” he said in a statement.
Musa had earlier announced the takeover of the company at an event organised by Yayasan Sabah in Sipitang this morning.
He said the move was a good example of a smart government-private sector partnership that would bring mutual benefit to all parties involved.
He said the state government had been proactive in resolving the issue by looking for suitable investors to take over SFI, previously owned by India-based Ballarpur Industries Ltd, India’s largest manufacturer of writing and printing paper.
Following a debt repayment exercise, SFI had ceased operations early this year, leaving almost 1,500, mainly local employees, in limbo as they had to undergo a temporary layoff scheme and take a 50% pay cut since January 2018.
Under the arrangement, a new company, Pelangi Prestasi Sdn Bhd, would assume control over SFI, including all its assets, land titles and timber licences.
The company would in turn retain the existing workforce. It gave a commitment to provide back-wages to employees subjected to the layoff scheme.
In addition, the new owner would also look into staff welfare, including support and training, and enhancing access to basic amenities like electricity and water.
It would also provide aid to local schools to ensure children there receive education under better conditions.
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