Aditya Birla Group mulls to set up $350m project in Laos
17 Mar '06
3 min read
The Aditya Birla Group has announced an investment of US$350 million in Lao People's Democratic Republic (Laos) for setting up of a project to raise pulp wood species plantations and a pulp plant for its viscose staple fibre (VSF) business.
Grasim Industries Limited, India, Thai Rayon Public Co Ltd, Thailand, and PT Indo Bharat Rayon, Indonesia — all of whom belong to the Aditya Birla Group — will invest in this project as equity holders.
The group has secured 50,000 hectares of land from the government of Laos on lease for a 75 year period. Eucalyptus plantations raised on the land would provide the feed for the pulp plant.
The project is to be implemented in two phases, first the plantation phase and second, the setting up of the dissolving pulp plant, given that eucalyptus plantations normally have a growth cycle of seven years. The commissioning of the pulp plant would coincide with the harvest of the first plantation, i.e., the seventh year. The pulp produced in Laos would be exported to the group's rayon fibre manufacturing units in India, Thailand and Indonesia, as well as newer locations.
Avers Kumar Mangalam Birla, the Aditya Birla Group Chairman, said, "This integrated plantation and pulp plant project with a 200,000 tpa capacity, is a forward step, planned ahead of time to ensure that our future expansion needs are met."
"In the cellulosic fibre business, we are in a leadership position globally and our intent is to grow the business exponentially. We will be requiring far larger quantities of pulp as our plans fructify. Our strategy to maintain our edge dictates the setting up of holistic backward integration from the plantation to the final VSF production," Birla added.
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