India’s Aditya Birla Group acquires leading Swedish Speciality Pulp Manufacturer Domsjö Fabriker

Aditya Birla Group acquired 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.

Mr. Kumar Mangalam Birla, Chairman of the Aditya Birla Group said the acquisition of Domsjö Fabriker, a world-class company, with the most environmentally-friendly technology marks a significant milestone for Aditya’s Pulp & Fibre business.

Its cutting edge technology and production process coupled with a state-of-the-art bio-refinery, add significant value to Aditya’s Pulp & Fibre operations. Its high quality pulp will enable Aditya enhance the supply of top quality premium VSF to its 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, said Mr Birla.

Mr. K. K. Maheshwari, Business Head, Pulp & Fibre said the acquisition is in line with the firm’s strategy of having a substantive part of its speciality pulp for its consumption through its captive source.

As a large quality manufacturer of speciality pulp, Domsjö has a synergistic fit with Aditya, said Mr Maheshwari. According to Mr Maheshwari, 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, he said.

Aditya intends to expand the innovation and research and development efforts at Domsjö as part of its global R&D efforts, added Mr. Maheshwari.

Mr. Ola Hildingsson, CEO of Domsjö Fabriker, said Aditya Birla brings a strong financial base and global presence to the firm’s operations and strengthens its position in the entire value chain. With a commitment to continue to expand Domsjo’s production facilities and invest further in research and development, Aditya Birla is the perfect owner of Domsjö, said Mr Hildingsson.

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

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