KUALA LUMPUR (Dec 5): A company majority-owned by Nextgreen Global Bhd (KL:NGGB) and IOI Corp Bhd (KL:IOICORP) is buying 32.794 hectares of industrial land in Pekan, Pahang for RM70.4 million to build an empty-fruit-bunch (EFB) pulp production facility.

The company, Neuwhite Paper Pulp Sdn Bhd, is 75%-owned by Nextgreen IOI Pulp Sdn Bhd (NIP), which  is a 55:45 joint venture between Nextgreen and IOI Corp.

The remaining 25% stake in Neuwhite is held by Hong Kong Paper Sources Co Ltd, a wholly-owned subsidiary of China’s Xiamen C&D.

In filing with Bursa Malaysia on Friday, Nextgreen said Neuwhite has entered into a deal to buy the land — located in Kampung Paloh Hinai, Pekan within the Green Technology Park — from Ultimate Ivory Sdn Bhd, a wholly-owned subsidiary of Nextgreen.

The land will house phase one of Neuwhite's production facility — an RM882 million project that serves as the core of Nextgreen’s partnership with Xiamen C&D. Once completed, the plant is designed to produce 150,000 tonnes of EFB-based pulp each year.

EFB is the fibrous residue left after the fruit is stripped from oil palm bunches during crude palm oil extraction.

Nextgreen said the purchase price of RM70.4 million represents a 3.56% discount to the RM73 million market value assessed by an independent valuer. Ultimate Ivory has also carried out major site preparation works — including levelling, building roads and preparing utilities — estimated at RM59.21 million, of which RM56.15 million has been completed to date.

Nextgreen added that proceeds from the land disposal will be used mainly to reduce borrowings — amounting to RM56 million — and for working capital. After obtaining approvals and taking possession of the land, Neuwhite will begin building the pulp plant, whose output will be sold under an exclusive offtake agreement with Xiamen C&D.

The company expects the land acquisition and approvals to be completed by the third quarter of 2026.

Shares in Nextgreen settled unchanged at 78.5 sen on Friday, valuing the company at RM852.89 million. Year to date, the shares are down more than 12%.

IOI Corp finished two sen or 0.49% higher at RM4.11, valuing the group at RM25.83 billion. The stock is up more than 6% so far this year.