Aditya Birla Group to acquire Chinese chemical fibre manufacturer
Our Corporate Bureau
04 September 2006
The Aditya Birla Group and global viscose staple manufacturer Grasim Industries Ltd have signed an agreement to take over the assets of China's Hubei Jing Wei Chemical Fibre Company through a joint venture with the latter. The Chinese company, located in the Hubei Province in mainland China, owns a 30,000-tonne capacity viscose stable fibre plant.
Under the agreement, the Aditya Birla Group and its overseas cellulose fibre companies — Thai Rayon Public Company Ltd, and P T Indo Bharat Rayon, Indonesia — will float a new joint venture company along with Hubei Jing Wei to acquire the assets of the Chinese company.
The Aditya Birla Group companies will have a majority stake in the new JV, to be called Birla Jingwei Fibres Company Ltd, with the parent company holding around 30 per cent.
This will be the Aditya Birla Group's second joint venture in China. Earlier, in 2003, the group had established Liaoning Birla Carbon Ltd, JV between its Thai Carbon Black Company Ltd and China's Dashiqiao Ronghua Chemical Ltd. Liaoning Birla Carbon Ltd, a 50,000-tpa carbon black producer, manufactures and markets furnace grade carbon black. The Indian group is also exploring business opportunities in sectors of phosphoric acid, acrylic fibre and some other products.
According to Aditya Birla Group chairman Kumar Mangalam Birla, "In viscose staple fibre, we are in a leadership position. Our intent is to grow even further globally in this sector. Our new JV, in which we have made a strategic investment, marks a major milestone in China. Furthermore, the Asian and Chinese markets offer enormous potential for commodity and speciality fibres, in both of which our Group has a strong foundation. We are expanding in both these segments".
A $8.3 billion conglomerate, with a market capitalization in excess of $12.5 billion, the Aditya Birla Group has 72 manufacturing units in various industry sectors in India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia, Belgium and China.