XSD Malaysia

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IFC’ proposed investment is a US$70 million senior secured A Loan to IFC is lending to XSD International Paper SDN. BHD (Malaysia) (“XSD” or “the Company”). XSD is a producer of duplex coated paper located in Penang, Malaysia. The company was established in 2018 by Chinese SD, one of the largest duplex board producers in China. XSD commenced production in March 2022 and currently operates one production line for coated duplex board with a designed capacity of 350,000 tons per annum (TPA). A second production line for grey board, with a capacity of 150,000 TPA, is under construction and is expected to be commissioned by April 2025.IFC’s proceeds will be used in two separate phase and expected to support the Company for the developments of: i) a biomass cogeneration plant to generate electricity and steam; and ii) a third production line for duplex board paper with a capacity of 250,000 TPA. The construction of the cogeneration plant is 60% complete, with commissioning expected in May 2025. The construction of the third production line for coated duplex board is anticipated to commence at the end of 2025 and be completed by early 2027.XSD uses wastepaper as its raw material input and biomass for its steam boiler. The cogeneration plant will utilize biomass for both steam and electricity production. Additionally, a peeling machine is being installed to process recycled cardboard to produce wood fiber equivalent raw materials, replacing the use of wood-based virgin pulp. Which will enable paper production to achieve 100% wastepaper products in early 2025.