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Birla Group to invest $2 bn to push fibre business
Jul, 13 2012
(India) -- The Aditya Birla Group plans to spend $2 billion (around Rs11,000 crore) in the next three years to add capacity and maintain his group’s position as the world’s largest producer of viscose staple fibre.
The Aditya Birla Group plans to raise its ability to produce the fibre used to make rayon, wipes and diapers by as much as 43% to 1 million tonnes by 2015, Krishna Kishore Maheshwari, director of the pulp and fibre business, said in an interview.
Last week, Aditya Birla Group agreed to buy Terrace Bay Pulp Inc., a paper pulp mill in Canada, to secure raw material supplies.
The investment in the fibre business will aid the group in boosting combined revenue by 63% to $65 billion in three years.
“These are very challenging times,” Maheshwari said, “The company aims to be the best quality producer at the lowest cost with focus on developing new products and improving cost structures.”
The company’s unit UltraTech Cement Ltd on 20 June was asked to pay a Rs1,180 crore fine by India’s anti-trust agency on charges that it was part of a cartel. UltraTech plans to challenge the order.
Maheshwari, who is also the managing director of Grasim, said that the company hasn’t changed its expansion plans. UltraTech is in the process of raising capacity by 20% to 62 million tonnes by 2014.
UltraTech Cement is exploring both organic and inorganic growth and the company plans to raise annual capacity to 75 million tonnes in a few years.
The company may also scout for acquisition opportunities in countries around the Indian Ocean, he said. In April 2010, Ultratech acquired the management control and equity stake of ETA Star Cement Company LLC, Dubai together with its operations in United Arab Emirates, Bahrain and Bangladesh.
The company is also in talks with Jaiprakash Associates Ltd to buy one of its cement units. The group was also one of the potential bidders for Lafarge SA’s cement operations in South Africa.
“We are expanding our geographical footprint, capacity footprint, R&D footprint to sustain and grow,” Maheshwari said.
By: Rashmi Kalia (ARI-C NEWS)
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