Aditya Birla Group to set up fibre plant in turkey

MUMBAI: Aditya Birla Group plans to invest $500 million to build a viscose staple fibre plant in Turkey, betting on the product's increased use in textiles as global production of the traditional raw material, cotton, slows down.

The 180,000-tonne-a-year plant, which will come up at the Adana Organised Industrial Zone, will be financed by the $35-billion group's units, including Grasim Industries and its subsidiaries in Thailand and Indonesia, a company executive said.

"Turkey imports all its VSF requirement and is a major global textile hub, making it the best location for a new plant," said V Sree Krishnan, president of Grasim's VSF division. According to international brokerages, Turkey is expected to become the world's second largest consumer of the fibre in five years.

The Birlas will invest a total of $950 million in building capacities for making fibre, including $450 million for expanding outputs at units in India. The Turkish plant will take the group's total fibre capacity to 1.1 million tonnes, the largest in the world.

K K Maheshwari, the group's global director for VSF, said a fifth of the Turkish capacity will be exported to the European Union and other neighbouring countries while the rest will be meant for textile companies in that country.

Besides India, the group has pulp and fibre operations across five countries. It recently acquired a speciality pulp unit, Domsjo, in Sweden for $340 million. Although the group did not specify the break-up of the $500-million investment, its Domsjo acquisition funding was equally shared among Grasim and the two arms in Thailand and Indonesia.