AV Birla Group to invest Rs 2,680 cr in Turkey

In its quest to globalise operations, the $35-billion Aditya Birla Group on Thursday said it would invest $500 million (Rs 2,680 crore) over the next five years to set up a viscose staple fibre (VSF) factory in Turkey’s Adana Organised Industrial Zone.

The Group is already the world leader in VSF manufacturing. It is to erect an 180-kilotonne per annum (ktpa) integrated unit, with a captive power plant and one each for carbon disulfide and sulphuric acid. It would come up in two phases.

“In the VSF sector, we are reckoned as a marquee group, with 21 per cent of global market share. VSF is a core business for us. Our aspiration is to significantly ramp up our global market share and our capacities by the turn of the decade. Establishing a world-class plant in Turkey is a step in this direction,” said Kumar Mangalam Birla, chairman of the Group.

While the plant is to cater primarily to the domestic market, the group will export around 20 per cent of the VSF produced to the European Union and other neighbouring countries. It will provide employment to close to 500 people and have a wider engagement through ancillary industries.

Currently, the Group has a 750-ktpa VSF capacity. The plan is to raise it to 1.1 million tonnes by 2015.

“We expect to commission our plant in Turkey by early 2015. This capacity will cater primarily to the textile industries here. Currently, 100 per cent of the VSF used in the textile and non-woven sectors is imported. Turkey is the fourth largest consumer of VSF in the world. It is expected to become the second largest over the next five years. So, setting up the manufacturing facility here makes eminent sense,” added K K Maheshwari, global director of the VSF business.

The Group’s pulp & fibre operations span six countries – Canada, Sweden, Thailand, Indonesia, China and India. It is also expanding capacity at home. A new 120-ktpa project at Vilayat in Gujarat (20 km from Dahej, in Bharuch district) and a 36-ktpa expansion at Harihar in Karnataka (280 km north of Bangalore, in Davanagere district) are underway at a total investment of $450 million (Rs 2,410 crore).

In April, the group acquired Domsjö Fabriker, a leading Swedish speciality pulp maker, for $340 million (Rs 1,820 crore). The speciality pulp produced by Domsjö is used primarily in the textile segment (VSF and viscose filament yarn).