MUMBAI: The Aditya Birla group, a leading player in the global viscose staple fibre (VSF) industry, on Monday reached an agreement with Hubei Jing Wei Chemical Fibre Company in China — a 30,000 tonnes per annum (tpa) VSF manufacturer headquartered in the Hubei Province of China.

Under the agreement, the Aditya Birla group, through its cellulosic fibre companies, namely, Grasim Industries Ltd., Thai Rayon Public Company Ltd., and PT Indo Bharat Rayon, Indonesia, along with Hubei Jing Wei, will form a joint venture company to be named, Birla Jingwei Fibres Company Ltd. The new company will acquire the existing assets of Jing Wei. While the Aditya Birla group will have a majority stake in the new joint venture, Grasim will have a stake of a little over 30 per cent.

The company intends to ramp up the current capacity of 30,000 to 60,000 tpa by December 2007. The total cost of acquisition, including the cost of expanding capacity, is around $70 million.

Kumar Mangalam Birla, Chairman, Aditya Birla group said, "In VSF, we are in a leadership position. Our intent is to grow even further globally in this sector. Our new joint venture, in which we have made a strategic investment, marks a major milestone in China. Furthermore, the Asian and Chinese markets offer enormous potential for commodity and speciality fibres, in both of which our group has a strong foundation. We are expanding in both these segments.''

"This is a win-win situation for Hubei Jing Wei, its stakeholders and our group,'' said Shailendra K. Jain, Director, Aditya Birla Management Corporation, responsible for the pulp, fibre and spinning business globally. "We will bring in the world class manufacturing practices and global marketing experience to ensure high product quality and market penetration.''

This joint venture is the second for the Aditya Birla Group in China, the first one being Liaoning Birla Carbon Ltd.

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