Birla Cellulose, an Aditya Birla group company, is setting up a plant in Turkey for an estimated investment of $350 million as it aims to ramp up supplies of the fibre to Russia and the European Union from that country, according to a senior company executive.
A base in Turkey ? which is witnessing 10-11% growth in the viscose segment compared with the global average of 8.1% ? will enable Birla Cellulose, the world’s largest producer of the fibre, to have duty-free access to the European market, traditionally India’s largest textile export destination.
“The trend of fast fashion is also rising in Europe and big retailers or garment producers want to change collections fast. so it is difficult to supply from India in a very short period and cater to demand,” Manohar Samuel, president (marketing and business development) of Birla Cellulose, told FE. Moreover, supplies to Russia can also be augmented from there, he said. The company has been a supplier of viscose fibre to many big retailers, including Wal-mart, H&M, Ikea and Marks & Spencer.
“We have already acquired land there and obtained the necessary licences. Already, we have some people working from there and we will start the process of setting up the plant very soon,” he added.
The plant will produce viscose initially, with a capacity of 250 tonne per day, he added. The company already has three pulp plants in Canada and one each in India and Sweden. It also has seven fibre plants, four in India and one each in Thailand, Indonesia and China.
Samuel said the company is also expanding its speciality fibre production capacity by around a third from the current 1,060 tonne per day by setting up a plant in Gujarat for an initial investment of Rs 2,500 crore. This plant, with a capacity to produce 360 tonne of speciality fibre a day, is expected to be operational by March, giving a further boost to the $3-billion company, which earned annual profits to the tune of $300 million.
The viscose fibre segment is growing at just over 8% in India, in sync with the global average, although its potential is yet to be realised fully as viscose accounts for just 4.1% of fibre production in the country, he said.
With land and water resources remaining limited and a growing population driving up the need for the production of more food items, man-made fibres such as viscose have an edge over cotton.
However, cotton fibre currently accounts for around 80% of the country’s fibre production, thanks mainly to favourable government policies. While cotton fibre doesn’t attract any excise duty, a 12.36% duty is imposed on viscose. “The government should come out with a fibre-neutral policy fast so that man-made fibre segments grow,” Samuel said, adding that viscose is being increasingly accpeted in India.