Mumbai, Sept. 4: The Aditya Birla group has formed a joint venture with China’s Hubei Jing Wei Chemical Fibre Company. The joint venture, Birla Jingwei Fibres Company Ltd, will acquire the viscose staple fibre (VSF) assets of the Chinese firm. The Aditya Birla Group will hold a majority stake in the new company.
Hubei Jing Wei Chemical Fibre is a 30,000-tonne VSF manufacturer headquartered in the Hubei province of China.
According to the agreement, Aditya Birla group, through its cellulosic fibre companies — Grasim Industries, Thai Rayon Public Company Ltd and Indonesia-based PT Indo Bharat Rayon, along with Hubei Jing Wei — will form the JV company.
The Birla group is planning to ramp up the current capacity of the company to 60,000 tonnes from 30,000 tonnes by December 2007. Although group officials did not divulge the amount paid for acquiring the stake, officials said total investment in the company after the expansion would reach $67 million including cost of acquisition.
“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,” said Kumar Mangalam Birla, chairman of the Aditya Birla Group.
