Eco Palm Paper Sdn Bhd is making efforts to produce packaging paper in a more environmentally friendly way.
The company yesterday signed a contract with Jiangsu Jinwo Machinery Co Ltd for the design, manufacture and commissioning of a palm-based corrugated paper plant in Pekan, Pahang.
“We have found a way to properly recover the waste and convert it into value-added products such as fibre, paper, pulp, and bio-diesel,” said managing director Larry Yong.
The company has found a way to utilise empty fruit bunches (EFB) from palm oil mill wastes to produce an alternative to wood-based pulp paper.
If EFB is not disposed of properly, it can emit harmful pollutants such as carbon dioxide, nitrogen oxide and ash. By using the EFB to produce non-wood paper, the company eliminates the potential environmental dangers that are caused by EFB dumping and illegal burning.
Apart from that, Eco Palm’s technology minimises the use of chemicals to produce paper.
When the project is fully completed, it will be producing 50,000 metric tons per year of corrugated medium paper from palm oil EFB.
Its target segment is the light gram mage paper. Yong said the company’s competitors in Malaysia produced light gram mage paper at a much higher cost as they used wood pulp to mix with recycled pulp.
Eco Palm uses EFB fibres which are similar to wood fibres, which means its paper is stronger than if only recycled pulp were used.
“There is enough market space for everyone as there are more than enough resources,” Yong commented on the fight for resources in this market.
Yong is confident that the company would be able to recoup its initial investment of RM120mil in the plant by 2016.
This estimate is based on current paper prices and the company’s business model.
They expect to deliver an internal rate of return of about 25-26 per cent.
The plant, located at Ecohub@Lepar is a 163-acre industrial site designed for the purpose of developing and implementing eco-friendly technological solutions based on the optimisation of agricultural by-products such as EFB.
Currently, only the first phase of the project, an integrated fibre plant that will produce high-grade fibre for the paper and pulp industry has been completed. The second and third phases will see the conversion of fibre to pulp and then paper. Operations for the project are expected to start in early 2013.
The signing ceremony between the two companies was witnessed by the Menteri Besar Pahang, Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob and chairman of Berjaya Corporation Bhd, Tan Sri Dato’ Seri Vincent Tan, who owns a major share in Eco Palm.
