The Aditya Birla Group signed an agreement to buy assets of the Terrace Bay Pulp mill in North Western Ontario, the news reports said.
Mr. Kumar Mangalam Birla, Chairman of Aditya Birla Group said, “The acquisition of the Terrace Bay Mill and its subsequent conversion into a dissolving grade pulp mill is a major strategic move.”
The Terrace Bay Mill was placed under Companies Creditors Arrangement Act in January 2012. Aditya Birla Group will be making this acquisition through a special purpose vehicle, AV Terrace Bay Inc. (Canada).
Grasim Industries Ltd plans to hold 40% stake in AV Terrace Bay Inc and the remaining 60% is planned to be held by Thai Rayon Public Co. Ltd.
In the next three years, Grasim will be contributing $44 million, out of the total equity contribution of $110 million.
The group will also be investing more than $250 million in a phased manner to convert the mill to produce the dissolving grade pulp with a capacity of 2,80,000 tpa.
The paper grade pulp mill should restart by October 2012, the news reports said. The terrace bay mill is considered as an anchor mill due to its location and its significant consumption of residual chips produced by the regional sawmills.
The transaction is subject to court approvals in Canada and other regulatory approvals in India, Canada and Thailand. It is expected to close by July 31, 2012.
The group has a very large presence in Canada. Furthermore, its major companies including AV Nackawic, AV Cell in the pulp and the fibre business, Aditya Birla Novelis in the metals business, Aditya Birla Minacs in the ITES business and Columbian Chemicals in Carbon Black business have highly successful operations in Canada.
Aditya Birla Group has a 6,000 strong workforce operating in the country. It also enjoys a strong relationship with government and with the community at large. Aditya Birla Group is the Indian multinational conglomerate company based in Mumbai. The group has diversified business interests and is a dominant player in sectors like branded apparel, carbon black, chemicals, fertilizers, insulators, financial services, telecom, BPO and IT services.