Grasim Industries forms Joint Venture in China for VSF Manufacturing Unit

Grasim Industries Ltd has announced that the Aditya Birla Group, a premium global conglomerate and a worldwide leading manufacturer of Viscose Staple Fibre (VSF), on September 04, 2006 has announced that it has reached an agreement with Hubei Jing Wei Chemical Fibre Company in China - a 30,000 TPA VSF manufacturer quartered in the Hubei Province of China.

Under the agreement, the Aditya Birla Group, through its Cellulosic Fibre Companies, viz., the Company, Thai Rayon Public Company Ltd, and P.T. Indo Bharat Rayon, Indonesia, along with Hubei Jing Wei, will form a Joint Venture Company (JV). The new JV to be named "Birla Jingwei Fibres Company Ltd", will acquire the existing assets of Jing Wei. Whilst the Aditya Birla Group will have a majority stake in the new JV, the Company will have a stake of a little over 30 percent.

Says Mr Kumar Mangalam Birla, Chairman, the Aditya Birla Group, "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".

The JV agreement signed on September 03 is subject to the requisite statutory approvals and the consequent transfer of various rights in favour of the JV Company.

This JV will be the second JV of the Aditya Birla Group in China. Earlier in 2003, the Group established Liaoning Birla Carbon Ltd spawned through its Thai Carbon Black Company Ltd and China´s Dashiqiao Ronghua Chemical Ltd. Liaoning Birla Carbon Ltd, a 50,000 TPA Carbon Black Company, manufactures and markets furnace grade carbon black. The Group is also exploring business opportunities in sectors of Phosphoric Acid, Acrylic Fibre and some other products as well.

A US$ 8.3 billion conglomerate, with a market capitalization in excess of US$ 12.5 billion, the Aditya Birla Group is anchored by an extraordinary force of 82,000 employees belonging to over 20 different nationalities. Over 30 per cent of its revenues flow from its operations across the world. The Group´s products and service offer distinctive customer solutions. Its 72 state-of-the-art manufacturing units and sectoral services span India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia, Belgium and China.

Further the Company has informed that it intends to ramp up the current capacity of 30,000 TPA to 60,000 TPA by December 2007.

Source : Equity Bulls

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