Sepanggar Paper Mills Secures RM100 Mil Loan for Sabah Expansion

Sepanggar Paper Mills Holdings Bhd has obtained a RM100 million term loan facility from AmBank Islamic Bhd to support its manufacturing expansion in Sabah, Malaysia. The five-year financing, secured via a sukuk murabahah agreement, carries a margin of 2.75% above the Cost of Funds rate and aligns with the company's strategy to boost production capacity amid rising regional demand for paper products. This move follows Sepanggar's recent operational enhancements, including upgrades to its packaging and industrial paper lines at the Sepanggar Bay facility.

The funds will primarily finance capital expenditures for new machinery, facility improvements, and working capital needs, positioning the company to capture growth in Malaysia's packaging sector driven by e-commerce and consumer goods. Sepanggar, a key player in Sabah's pulp and paper industry, reported steady revenue growth in recent quarters, with this loan underscoring investor confidence in its long-term prospects. Industry analysts view the deal as a positive signal for sustainable expansion in Southeast Asia's paper market, where capacity constraints persist. The agreement was finalized recently, with disbursements expected to commence shortly, enhancing Sepanggar's competitive edge against larger regional producers.