Aditya Birla to buy Terrace Bay pulp mill


NBSK pulp production at Terrace Bay will be resumed in October this year, says Aditya Birla. Conversion to dissolving pulp will probably follow in 2016.

The Aditya Birla Group plans to acquire the idled Terrace Bay NBSK pulp mill and to convert the site into a dissolving pulp mill. The multinational company announced on 5 July it has already signed an agreement to purchase the assets of the Terrace Bay mill through a special purpose vehicle, AV Terrace Bay Inc. The transaction is subject to court approval in Canada and other regulatory approvals in Canada, Thailand and India. It is expected to close by 31 July 2012.

Grasim Industries Ltd., an Aditya Birla Group company, is to pick up a 40% stake in AV Terrace Bay Inc. The remaining 60% is to be held by the group subsidiary Thai Rayon Public Co. Ltd.

Aditya Birla puts the total equity contribution for the Terrace Bay pulp mill at $110m. Another $250m will be invested to convert the mill to produce dissolving grade pulp with a capacity of 280,000 tpy, the group explained.

The conversion of the mill is slated for 2016. Until the conversion, the 350,000 tpy Terrace Bay pulp mill will produce and sell NBSK market pulp. The production should restart by October 2012, according to Aditya Birla.

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