MALAYSIA’s only integrated pulp and paper manufacturer, Sabah Forestry Industry Sdn Bhd, is forcing 1,390 workers to take a half-pay cut for six months from January next year after struggling with debts for years.

The workers were also allowed to take leave or work elsewhere until SFI is auctioned to the highest bidder, a source said.

“Only around 200 workers would be retained until the new owners take over.

“It is not clear those who have been selected for the half pay cuts would be rehired,” The Malaysian Insight was told.  

Workers turned up at the mill this morning to go through the list of selected workers for the programme.  

The Sipitang-based SFI founded in 1988, is one of Malaysia’s largest timber growers and wood processors.

It manages 288,000 hectares of forest estate, pulp and paper manufacturing facilities, an integrated timber complex and a veneer and plywood factory.

In 2007, it began operations as a subsidiary of Ballipur Industries Limited (BILT), India’s largest manufacturer of writing and printing paper.

It is understood the state government holds 2% share in the company and BILT 98%.

On September last year, SFI staff and workers were instructed to vacate its premises in a debt recovery exercise ordered by Shell Timur Sdn Bhd.

The company is believed to owe Shell Timur RM13 million.

On January this year, local paper Borneo post reported 1,600 SFI workers were out of job.

In March, Sabah high court agreed to delay the court proceeding to wind up SFI for another two months to allow the submission of workers’ claim of around RM23 million.

It was known then SFI owed RM422 million to Rabobank Nederland of Labuan Offshore Financial Centre.

The Daily Express also reported independent auditors were appointed by the bank to look into SFI’s accounts in a bid to rescue the business entity, which fell into decline following two privatisations after Parti Bersatu Sabah formed the state government in the 1990s.  

Workers took SFI to Sipitang labour court over the wages issue in 2009 but was dismissed on grounds it was beyond the court’s jurisdiction.

Sipitang Warisan youth chief Nazib Maidan said he was disappointed by the situation.

“Most of the workers have school-going children and bills to pay,” he said. – November 30, 2017.