Sales volumes improved marginally. On a sequential basis, the volumes reflect a healthy growth of 21per cent, driven by strong demand, both from domestic and export segments.
Upon the completion of expansion and modernisation at an outlay of Rs.664 crore, the company's capacity will stand increased from its current level 266,450 tons to 315,725 tons per annum by FY08.
This would enable the company to cater to the increasing demand for VSF in India and South Asian countries.
To get a foothold in China, the world's largest VSF market, the company together with its overseas Group companies, has formed a joint venture company (Birla Jingwei Fibres Company Limited) with Hubei Jing Wei Chemical Fibre Company.
Its current capacity of 30,000 tons per annum is expected to be ramped up to 60,000 tons per annum in about a year's time. The company's stake in the joint venture would be 31 per cent. The Group's stake would be 70 per cent.
The integrated plantation-cum-pulp plant at Laos and the acquisition of St. Anne Nackawic Pulp Mill, would lead to greater cost competitiveness.
The company would stand to benefit from increased output in Indian textile industry, post quota abolition.Besides, the strong prices of competing fibres also portend well. The outlook for the VSF business continues to be good.
Grasim Industries Limited
marketing@alchempro.com
