KUALA LUMPUR (Dec 18): The World Bank Group, through its private sector arm the International Finance Corporation (IFC), entered into a partnership with XSD International Paper Sdn Bhd to fund the expansion of recycled materials and renewable energy resources for paper production in Malaysia.

In a joint statement on Thursday, the IFC said it has extended a US$70 million (approximately RM286.16 million) loan to the paper manufacturer that will be used to build a biomass-based cogeneration plant in Kulim, Kedah.

The remaining financing will also fund the development of XSD’s third production line for coated duplex board paper — a type of glossy paper board used for high-end packaging in the cosmetics, electronics and pharmaceuticals industry.

The new line is expected to add 300,000 tonnes of annual capacity, raising the company’s total paper production capacity to 800,000 tonnes per year.

“Our partnership with XSD reflects our commitment to creating jobs and promoting best practices, while simultaneously promoting inclusive and sustainable growth in the country,” said IFC regional industry director for manufacturing, agribusiness and services in Asia-Pacific Carsten Mueller in the statement.

IFC said the project is expected to generate economic benefits for Kedah, including the creation of an estimated 750 direct jobs and 1,810 indirect and induced jobs, contributing to employment opportunities and income growth for local communities.

XSD chairman Li Shengfeng said the partnership supports the company’s efforts to expand recycled paper production and adopt cleaner energy solutions, in line with its sustainability objectives.

Based in Kedah, XSD International is a wholly owned subsidiary of Chinese papermaking conglomerate Zhejiang XSD Holding Group Co Ltd, and specialises in producing coated duplex board, grey board, composite paperboard, kraftlinerboard, and more that are made from recycled waste paper and 100% locally sourced fuels, according to its website.