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Aditya Birla group acquires Swedish speciality pulp manufacturer

19 Apr '11

3 min read

Aditya Birla Group today announced the acquisition 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 US $ 340 million from a Swedish consortium.

Comments Mr. Kumar Mangalam Birla, Chairman of the Aditya Birla Group: “The acquisition of Domsjö Fabriker, a world-class company, with the most environmentally-friendly technology marks a significant milestone for our Pulp & Fibre business. Its cutting edge technology and production process coupled with a state-of-the-art bio-refinery, add significant value to our Pulp & Fibre operations. Its high quality pulp will enable us enhance the supply of top quality premium VSF to our customers. The Pulp & Fibre business is a core business of the Aditya Birla Group. Domsjö has a highly professional management team and a committed staff. I most warmly welcome them to the Aditya Birla Group.”

Says Mr. K. K. Maheshwari, Business Head, Pulp & 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, Domsjö 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 Domsjö's growth. Going forward, our intent is to expand the innovation and research and development efforts at Domsjö as part of our global R&D efforts," added Mr. Maheshwari.

Says Mr. Ola Hildingsson, CEO of Domsjö Fabriker: “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. In addition, their bio-refinery enables the Company to extract the full value from its operations by the production of ethanol and lignosulphate as by-products. Ethanol obtained from its bio-refinery is used in bio fuel, paint and printing sectors. Lignosulphate, is used as an additive in concrete, ceramics and dye pigments, among others.

The production process is environmentally sensitive with low levels of emissions. The bleaching process for pulp is totally chlorine free (TCF) and is conducted through a unique closed loop bleaching process. Domsjö thus meets the highest environmental standards.

This acquisition will help the Group's Pulp & Fibre business to further consolidate its global position.

Aditya Birla Group