Grasim to invest $500 mn in Turkey to set up plant

The plant will produce VSF, a raw material used for making apparels and home textiles

Aditya Birla Group company Grasim Industries is working on setting up a $500 million (Rs 2,764 crore) plant in Turkey for producing VSF, a raw material used for making apparels and home textiles.

"A 180,000 tonnes per annum greenfield plant in Turkey is in planning stage," Grasim Chairman Kumar Mangalam Birla said in the company's annual report for 2011-12.

"A detailed study and obtaining the requisite approvals to get this project going, are underway. As a country, Turkey offers enormous potential, given its pre-eminence as a major textile hub," he said.

Grasim would invest $500 million over the next five years to set up the facility along with a captive power plant and Sulphuric Acid plant. It woudld come up in two phases.

"Currently our VSF manufacturing capacity is 7.5 lakh tonne per annum. Our ambition 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 in Turkey," Grasim said.

It also plans to export around 20% of the VSF produced in Turkey to European Union and other nations.

Grasim had acquired Sweden-based speciality pulp maker Domsjo Fabriker in 2011. Earlier this month, the company announced that it has signed an in-principle agreement to buy the assets of the Terrace Bay Pulp Mill in Ontario.

Grasim Industries is also expanding capacity through a new project in Gujarat's Vilayat with 1.2 ltpa capacity, as well as expansion in Karnataka's Harihar by 36,500 tpa with a total investment of Rs 3,700 crore. It is also raising capacity at Domsjo Fabriker by 45,000 tpa.

"These expansion projects will be commissioned during the 2012-13 financial year. Collectively, these projects will ramp up capacities by 50% to 49.8 ltpa," Birla said.

In the cement sector, Grasim is investing Rs 10,400 crore for expanding capacity in the existing plants in Chhattisgarh and Karnataka by 10 million tonnes per annum to take the total to 62 mtpa.

"Brownfield expansions at Chhattisgarh and Karnataka, are expected to become operational by the first quarter of FY14," Birla said.