The Aditya Birla Group said on Thursday it has signed an agreement to purchase the assets of the Terrace Bay Pulp Mill in Canada and will invest $110 million in the next three years to revive the sick plant, a move that would give the $34-billion group enough raw material pulp to feed its plants in India.
Birla group company Grasim Industries will own 40% and rest by Thai Rayon Public in a special purpose vehicle ? AV Terrace Bay Inc, which will acquire the Canadian company.
Until 2015, Grasim would invest $ 44 million and rest by Thai Rayon.
?The acquisition of the Terrace Bay Mill and its subsequent conversion into a dissolving grade pulp mill is a major strategic move,? Kumar Mangalam Birla, chairman, Aditya Birla Group, said.
?In the VSF business, we enjoy global leadership. To sustain ongoing growth, we have an integrated business model, spanning the entire value chain from plantation to pulp to fibre. The Terrance Bay Mill, upon conversion, will be geared to provide superior quality pulp for our VSF plants worldwide?.
The Group will make more than $250 million investment until 2016 to convert the mill to produce dissolving grade pulp with a capacity of 2,80,000 tonnes a year. Until the conversion, the Terrace Bay Mill is considered an anchor mill due to its location and its significant consumption of residual chips produced by the regional sawmills.
The Aditya Birla Group has been expanding its business in Canada by purchasing companies.