Kumar Birla to invest $350 mn in Laos pulp plant

The Aditya Birla group will invest $350 million in Laos to develop plantations and a pulp plant for its viscose staple fibre business.

In a statement, the group said it planned to raise eucalyptus plantations for feeding its proposed pulp plant and aimed at having the set-up ready in seven years.

The pulp produced in Laos will be exported to the group's rayon fibre manufacturing units in India, Thailand and Indonesia, as well as to new locations.

"This integrated plantation and pulp plant project with a 200,000 tonne-per-annum capacity is a forward step, planned ahead of time to ensure that our future expansion needs are met," Kumar Mangalam Birla, the group's chairman, said.

Aditya Birla group companies Grasim Industries, Thai Rayon Public Co Ltd, and PT Indo Bharat Rayon will be equity investors in the project. Grasim has a 24 per cent share of the global viscose staple fibre industry. The fibre is biodegradable.

"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 this holistic backward integration from the plantation to the final VSF production," Birla added.

Shailendra Jain, director of the group's pulp and fibre business, said, "Laos is at a take-off stage of economic growth and our entry is rightly timed to leverage the liberal foreign investment environment there. Laos is also strategically located to support our rayon fibre manufacturing plans in Southeast Asia where textile hubs are growing."

The Aditya Birla group's seven pulp and fibre plants span India, Thailand, Indonesia and Canada, with a collective capacity in excess of 775,000 tonnes per annum.