PUTRAJAYA (From news reports) -- Pulp and paper manufacturer Nextgreen Global Bhd has partnered with China's Xiamen C&D Paper & Pulp Group Co Ltd to establish a new entity in Malaysia.

This follows a joint venture (JV) agreement between Nextgreen's unit, Nextgreen IOI Pulp Sdn Bhd (NIP), and Hong Kong Paper Sources Co Ltd, a subsidiary of Xiamen C&D Paper & Pulp.

The JV aims to develop Malaysia's first integrated pulp production facility, with an annual capacity of 150,000 tonnes.

The newly formed entity will lead the construction of a high-capacity, bio-integrated pulp facility at the Green Technology Park (GTP) in Pekan, Pahang.

The park is located within the East Coast Economic Region (ECER) Special Economic Zone, a key area earmarked for sustainable industrial growth.

Under the agreement, NIP, a JV between Nextgreen Global and IOI Corp Bhd, will hold a 75 per cent equity stake, while Xiamen C&D Paper & Pulp will own the remaining 25 per cent.

Xiamen C&D Paper & Pulp is a subsidiary of Xiamen C&D Corp Ltd, a fortune global 500 company with operations in pulp and paper manufacturing, real estate, and other sectors in China and internationally.

The facility to be developed on 32.8 hectares of land within the park is targeted for completion within 24 months and will utilise Malaysia's abundant palm biomass, specifically empty fruit bunch, to produce high-quality pulp.

Phase 1 will see 150,000 tonnes of pulp being produced annually, with a total estimated capital expenditure of RM900 million.

Nextgreen Global will contribute technology and technical expertise using its patented preconditioning refiner chemical-recycle bleached mechanised pulp technology, while Xiamen C&D will take the lead in product off-taking and distribution.

Xiamen C&D Paper & Pulp general manager Zhang Xiao Hui said the JV reflects the growing synergy between China and Malaysia in building a greener economy together and represents an important initiative for the group in the pulp and paper sector.

Zhang, who is also the director of Hong Kong Paper Sources said the partnership also lays the foundation for a more sustainable pulp and paper supply chain, as well as a more integrated regional economy.

This is by integrating NIP's strength in palm biomass sourcing and processing innovation, together with his company's robust distribution network.

"Backed by the strong support from the Malaysian government, and strategically located within the ECER Special Economic Zone, the GTP is set to emerge as a regional hub for green manufacturing and bio-industrial activity.

"This is beyond an investment infrastructure, it serves as a blueprint for environmental, social and governance-centric development," he said at the signing ceremony here today.

Zhang said both parties are committed to promoting and advancing the development of environmentally friendly pulp production facilities, which will be a critical catalyst in realising the GTP masterplan and advancing both nations' ambitions for sustainable economic development.