The Malaysian Insight

SABAH wants to increase its stake in troubled paper mill firm Sabah Forest Industries (SFI), after the company has ground to a halt under the control of foreign firms.    

State Chief Minister Mohd Shafie Apdal said he is now looking into ways to increase Sabah’s stake in SFI.

The state government now owns only 2% stake after SFI was sold to foreign firms by the previous Parti Bersatu Sabah (PBS) and Barisan Nasional governments.  

“SFI is no longer ours. It has been taken over by foreigners. Only the workers are Sabahans.

“I must find ways to increase our shares in SFI. If there are any investors interested to take over the mill, we will look into the company’s background first.

“We don’t want a repeat of past mistakes,” he said during the launching of the Sipitang 2.0 Clean and Beautiful programme in Sipitang today.

Last year, SFI’s previous owner Ballarpur Industries forced its workers to take a 50% pay cut for six months from January 2018 to mitigate its rising debts.

The Sipitang-based SFI was founded in 1988 and given to manage 288,000ha of forest estate, pulp and paper manufacturing facilities.

The company was previously sold to Lion Group during the PBS government and later taken over by India’s Ballarpur in 2007 at RM991 million.

It was reported in April last year that Ballarpur had sold SFI to Pelangi Prestasi – a unit under the Albukhary Group – for RM1.2 billion.

According to Shafie, SFI’s paper mills are no longer fully functional, as most of the machineries have become “scrap metal”.

He said Sabah has not only lost a government-linked company, but also the rights to its forests, including felling timber.

“Not only did they not manage the mills well, but they also took our timber,” he said.  

On another note, Shafie approved the Sipitang District plans to upgrade the district office into an information centre to assist visiting tourists to the district.

The information centre will cost the state government RM2 million to reconstruct.

“I will try to find the funds. I know Sipitang truly has the potential to become a tourism hub as it has been recognised as the gateway to the Brunei, Kalimantan and Sarawak borders,” he said. – March 30, 2019.