Sabah Forest Industries Sdn Bhd - Sabah Forestry Department

Sabah Forest Industries Sdn Bhd;a proactive member of the HOBand contributor to Sabah’s greeneconomySFIbilt

SFISFI is a limited liability company incorporated inMalaysia.biltThe majority shareholder is Ballarpur IndustriesLimited (BILT), India’s largest pulp and papermanufacturer.BILT is a member of the Avantha Group, a USD 5billion transnational group of companies, involvedin engineering, power, IT, food, pulp, paper andtimber amongst others. Avantha’s head office isin Delhi and the Group employs more than20,000 people in 10 countries.

SFISFI has three divisions

SFI• Pulp and Paper• Plantations• Integrated TimberComplex (ITC) consistingof a sawmill and plymill

SFI manages a total estate of 288,623 ha located in the south-western part of SabahForest Reserve (Government land licensed to SFI) 276,623 haTitled Land (land owned by SFI)Total12,000 ha288,623 ha

We, the Governments ofBrunei Darussalam, Indonesiaand Malaysia …… declare that;……we willpromote people’s welfare..[by the]..effective management offorest resources andconservation of a networkof protected forests,productive forests andother sustainable land uses

SFIGreen EconomyUnited Nations Environment Programme (UNEP)definition“The Green Economy is one thatresults in improved human well-beingand social equity, while significantlyreducing environmental risks andecological scarcities”

iltBILT has proud record ofcorporate social responsibilityAwards & Recognition Received by BILT• TERI Award for CSR, 2003-04• Business for Social Responsibility (BSR) Award for CSR, 2005-06• Business World FICCI- SEDF CSR Award, 2005-06• Asian CSR Award, 2005-06• Golden Peacock Global Award for CSR in Emerging Economies, 2007• Intel - AIM Corporate Responsibility Award, 2007• TERI Corporate Awards for Business Response to HIV/AIDS, 2008• Level 4 CSR Rating for BILT by Karmayog• Ranked amongst the top ten companies in CSR in India by TimesFoundation

SFICSR is now a priority at SFIwith its own Department andSenior ManagerExamples of current CSRactivities1. “Tagal” (traditional) fishmanagement in Ulu Padas

SFILaunching of Tagal System at Long Pasia on 27 July 2011 byDeputy Chief Minister Datuk Sri Panglima Yahya Hussin

SFILaunching of Tagal System at Long Pasia on 27 July 2011 byDeputy Chief Minister Datuk Sri Panglima Yahya Hussin

SFIHarvesting fish from “Sistem Tagal”or traditional tagal fish management system

SFIExamples of current CSRactivities2. Avantha Foundation (Sabah) andthe Avantha Rainforest Researchand Education Centre (ARREC)

Avantha Rainforest Education and Research CentreMissionTo provide a venue where educators, scientists andmembers of the community can meet to learn andexchange information on rainforests while enjoyingthe rainforest environment

SFIAvantha Rainforest Researchand Education Centre, MuayaAn area of 300 ha of land owned by SFI is in theprocess of being gifted to the Avantha Foundation(Sabah)This part of a 1,900 ha block set aside purely forconservation purposesAltogether the SFI conservation estate is morethan 100,000 ha or 40% of the total area undermanagement.

SFI6000 ha Titled Land at GanuiAvantha RainforestResearch & EducationCentre landOther conservationareasWildlife corridorPlantationSecondary forest

Staff and post-graduate students from UMS Institute forTropical Biology and Conservation together with SFI staff atARREC for 2010 Scientific Expedition

Universiti MalaysiaSabah (UMS) studentsundertaking field workat ARRECThis is toad, weighing3kgs, is endemic to asmall area of southwesternSabah

UniversitiMalaysia Sabah(UMS) studentcataloguingsamples at ARRECduring the the2011 ScientificExpedition toMuaya

Staff and students from UMS carrying out field work atARREC during 2010 Scientific Expedition

UniversitiMalaysia Sabah(UMS) staffmembercataloguingsamples at ARRECduring the the2011 ScientificExpedition toMuaya

SFIYouth Development programme at ARREC conducted by SFICSR Department

SFISFIYouth Development programme at ARREC conducted by SFICSR Department

SFISFI has two licences covering twodistinct parcels of land1. Natural Forest Management Licence2. Industrial Tree Plantation Licence

SFI104,822haNatural Forest Management (NFM)Areas of natural forest managed for thesustainable production of timber usingreduced impact logging (RIL) techniques183,316 ha288,138 ha

SFIReduced Impact Logging (RIL)Careful planning based on a knowledge of forestgrowth combined with good execution by trainedoperatives ensure that during log extraction theimmature trees are not damaged and the rightconditions are created for natural regeneration

SFIGood planning

SFICareful execution

SFIReduced Impact Logging• Mandatory in Forest Reserves in Sabahsince the beginning of this year (2011)• SFI has voluntarily been practicing RILsince 2000 because of the conservationbenefits• This in spite of lower yields and highercosts

SFI107,053 ha181,570 haIndustrial Tree Plantations (ITP)Existing plantations and areas of degradednatural forests where we must, under the termsof our licence, convert the operable areas toplantationsNote: Conversion is subject to the satisfactoryresolution of environmental and social issuesincluding the identification and protection ofhigh conservation value forests (HCVF)288,623 ha

SFIExistingplantation16%Areas to beconverted toplantation21%PermanentNaturalForest63%

SFI

SFIHigh Conservation Value Forests(HCVF)HCVF survey recently completed with thetechnical support of WWF Malaysia andinvolving experts from– WWF, Malaysia– Universiti Malaysia Sabah (UMS)– Sabah Museum– PACOS– Forest Research Centre, SFD Sandakan

SFINetwork of SFIConservation Areasconnecting withForest Reserves setaside forconservation andthe KayanMentarang NationalPark (Indonesia)

SFIExpansion of pulp millA RM 650 million expansion of SFI’spulp mill is in process of beingcommissioned

SFI30 Oct 2011

SFIPulp mill expansion• Will double pulp production from110,000 to 220,000tonnes/annum• Increase efficiency (reduce costsof production)• Reduce emissions

• Original plan was to use coal to meetmill’s power requirements because oflower cost.• New mill will obtain all its energy needsfrom renewable bio-fuels and SFI isestablishing more than 10,000 ha ofplantations solely for the production ofenergy.• New mill will not use elemental chlorinewhich is potentially dangerous as is dioxinwhich is a bye-product of its manufacture.

• New pulpmill is designed to use plantationtimber and will run exclusively on 1.1million tonnes of plantation wood in thenear future• CO 2 produced in the paper making processis converted to precipitated calciumcarbonate (PCC).These and other best-availabletechnologieswill reduce greenhouseemissions and be more in keepingwith the State’s desire for a “greeneconomy”.

SFIGreen EconomyUnited Nations Environment Programme (UNEP)definition“The Green Economy is one thatresults in improved human well-beingand social equity, while significantlyreducing environmental risks andecological scarcities”

We, the Governments ofBrunei Darussalam, Indonesiaand Malaysia …… declare that;……we willpromote people’s welfare..[by the]..effective management offorest resources andconservation of a networkof protected forests,productive forests andother sustainable land uses

SummarySFI is an active and willing partner ofthe Government of Sabah by;• Promoting people’s welfare throughour CSR programmes• Managing all our production forests(both natural and plantations) in asustainable way

• Being a major contributor of the State’spolicy of producing wood for industry fromplantations established on 10% of thepermanent forest estate• Providing direct employment for thousandsand indirect employment for tens ofthousands• Paying taxes, levies and earning foreignexchange

• Providing a measure of wood and papersecurity• Maintaining a network of protected forestsand connecting these to those of ourneighborsWe have made our best effortto meet objectives of HOB andGreen Economy