New Delhi: Aditya Birla group on Thursday said it is acquiring Terrace Bay Pulp Inc, a North American paper grade pulp company, for USD 110 million (over Rs 600 crore) and would make a further investment of over USD 250 million (about Rs 1,400 crore) on this company in a phased manner.
This would be the group's sixth acquisition in about six months and 28th overall.
The group's Grasim Industries would acquire 40 per cent stake in a special entity created for this acquisition, while the remainder would be held by Thai Rayon Public Company Ltd.
Over a period of the next three years, Grasim would be contributing USD 44 million out of the total equity contribution of USD 110 million, the group said.
Besides, the group will be investing more than USD 250 million in a phased manner to convert the mill to produce 'dissolving grade pulp' with a capacity of 2,80,000 tonnes per annum.
Commenting on the deal, Aditya Birla Group Chairman Kumar Mangalam Birla said: "The acquisition of the Terrace Bay Mill and its subsequent conversion into a dissolving grade pulp mill is a major strategic move.
"In the VSF business, we enjoy global leadership. To sustain ongoing growth, we have an integrated business model, spanning the entire value chain from plantation to pulp to fibre. The Terrance Bay Mill, upon conversion, will be geared to provide superior quality pulp for our VSF plants worldwide," he added.
Until the conversion, which is likely to happen in FY 2016, the mill will produce and sell Paper grade pulp.
The Paper Grade Pulp mill should restart by October 2012. The Terrace Bay Mill is considered an anchor mill due to its location and its significant consumption of residual chips produced by the regional saw mills.
First Published: Thursday, July 05, 2012, 21:35