Minister of Finance and Treasury Hon. Gordon Darcy Lilo on Monday has signed a Memorandum of Understanding between the National Government, the Investment Corporation of Solomon Islands (ICSI) and a major Wood Manufacturing Company from Taiwan.
The MOU now paves the way for the investment of US$6 million into the Kolombangara Forestry Plantation Limited (KFPL) and US$5 million for a new sawmill factory that will be established on KFPL for wood production.Under the Joint Venture arrangement, the Nien group of Taiwan companies owns 60% shares in KFPL while ICSI retains 40% shares.
The Nien Wood Manufacturers Company has, over the years, been actively engaged in manufacturing and exporting wood products worldwide with an annual turnover of US$350 million.
KFPL operates a 14,400 hectare certified-sustainable forest plantation on Kolombangara Island in Western Province.
KFPL Board Chairman Tony Hughes said the effect of the incoming investment will strengthen KFPL's financial position by reducing its external debt and provide assured access to the international market for its wood exports.
It will also enable KFPL to increase quality timber products to world market standards as well as to be re-planted with high-quality trees.
He said the sawmill factory would be a direct investment owned by Nien and the construction of the factory would enable in-country production of sawn timber to overseas market requirements.
"The investment would add substantial value to national exports and more so creating 150 new jobs for people in the rural areas," Mr Hughes said.
Minister Lilo welcomed the Joint investment describing it as a significant development for Solomon Islands.
"This indicates overseas investor confidence in the economic and social environment of our country," he said.
He assured other foreign investors of the government's commitment to support genuine investors who are willing to invest and support development of the country's economy.