To create jobs and promote sustainability in Malaysia’s paper industry, the World Bank Group, through its private sector arm the International Finance Corporation (IFC), has announced a partnership with XSD International Paper Sdn Bhd (XSD), a manufacturer of coated duplex board paper and grey board in Malaysia.

The partnership will support XSD’s efforts to boost environmentally responsible paper production using recycled materials and renewable energy, IFC said in a statement on Thursday.

IFC has provided a $70 million financing package to XSD to fund its strategic growth – including a $28 million green loan – to finance the planned construction of a cogeneration plant in Kulim, Kedah that will use biomass to produce electricity and steam.

The remaining financing will be used to fund a third production line for duplex board paper, which will enable XSD to produce an extra 300,000 tons of paper per year, bringing the company’s capacity to 800,000 tons per year.

The project is expected to generate economic benefits by creating an estimated 750 direct jobs and 1,810 indirect and induced jobs, creating employment opportunities and lifting incomes for local communities in the state of Kedah.

“Our collaboration with IFC represents an important milestone in advancing sustainable growth in Malaysia’s paper industry,” said Li Shengfeng, Chairman of XSD International Paper.

“By expanding recycled paper production and adopting cleaner, renewable energy, we are strengthening the circular economy and reducing our environmental footprint,

“This partnership reflects our shared belief that responsible manufacturing can drive meaningful progress, and XSD remains committed to contributing to a greener, more resilient industry for future generations,” he added.

Meanwhile, Carsten Mueller, Regional Industry Director, Manufacturing, Agribusiness and Services, Asia Pacific at IFC, said supporting Malaysia’s ambitions to enhance the sustainability and competitiveness of its manufacturing sector is a key priority for IFC and the broader World Bank Group.

“Our partnership with XSD reflects our commitment to creating jobs and promoting best practices, while simultaneously promoting inclusive and sustainable growth in the country,” he added.

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