Aditya Birla buys Domsjö for 340 mn

Aditya Birla group has announced the takeover of Domsjö Fabriker,a leading Swedish speciality pulp and bio-refinery company.

Continuing its acquisition spree,the Aditya Birla group has announced the takeover of Domsjö Fabriker,a leading Swedish speciality pulp and bio-refinery company,through its global companies Thai Rayon Public Company Limited Thailand and Indo Bharat Rayon Indonesia for a sum of 340 million from a Swedish consortium. The total investment by the Birlas will amount to 415 million as they will be pumping in 75 million for the ongoing capital expenditure plan.

The production capacity of the foreign firm,which clocked a revenue of 390 million last year,will be increased to 2.55 lakh tonnes by June 2012 from 2.1 lakh tonnes at present. The Aditya Birla group is the worlds largest producer of VSF,with a 24 per cent global share. Most of the capacity is operated out of group firm Grasim Industries .

Commenting on the deal,Aditya Birla Group Chairman Kumar Mangalam Birla said: The acquisition further enhances our position in the global pulp and fibre business.

Last week,Aditya Birla Chemicals acquired the chloro chemicals division of Kanoria Chemicals amp; Industries Ltd for a cash consideration of Rs 830 crore.

There is a great opportunity to further grow the company. Domsjö has an extensive investment programme for capacity expansion from its current 210 000 tons to 255 000 tons per annum by 2012. We are fully committed to Domsjös growth. Going forward,our intent is to expand the innovation and research and development efforts at Domsjö as part of our global Ramp;D efforts, Birla said.

Said KK Maheshwari,Business Head,Pulp amp; Fibre,This acquisition is in line with our strategy of having a substantive part of our speciality pulp for our consumption through our captive source. With Domsjö Fabriker,we are closer to this goal.

As a large quality manufacturer of speciality pulp,Domsjös has a synergistic fit with us. There is a great opportunity to further grow the company. Domsjö has an extensive investment programme for capacity expansion from its current 210 000 tons to 255 000 tons per annum by 2012. We are fully committed to Domsjös growth. Going forward,our intent is to expand the innovation and research and development efforts at Domsjö as part of our global Ramp;D efforts, he said.

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Ola Hildingsson,CEO of Domsjö Fabriker,said,For Domsjö,this is great news. Aditya Birla brings a strong financial base and global presence to our operations and strengthens our position in the entire value chain.

With a commitment to continue to expand our production facilities and invest further in research and development,Aditya Birla is the perfect owner of Domsjö. Speciality pulp produced by Domsjö,finds primary use in the textile segment viscose staple fibre and viscose filament yarn. Around 25 per cent of the production is used in premium applications,such as binding agents for medical products,particularly pharmaceutical tablets and in casings wraps for the food industry.