Swedish Domsjö Sold to Aditya Birla Group

Thai Rayon Public Company (Thailand) and Indo Bharat Rayon (Indonesia) has acquired Sweden-based speciality pulp and bio-refinery company Domsjo Fabriker for about Rs 1,500 crore ($340 million).
 The two companies are subsidiarfies of Aditya Birla Group.
 Domsjö Fabriker is a leading Swedish biorefinery and specialty cellulose company.
 The Aditya Birla Group will jointly fund fund $180 million for the buyout even as $160 million will be kicked in by them through a Special Purpose Vehicle(SPV).
 “For Domsjö, this is great news”, says Ola Hildingsson, CEO of Domsjö Fabriker.
 “This brings a strong financial base and global presence to our operations and strengthens our position in the entire value chain. In combination with a commitment to continue to expand our production facilities and invest further in research and development, Aditya Birla is the perfect owner of Domsjö”.
 Domsjö’s overall strategy is to bolster its inputs and it has, in addition to an increased production of specialty cellulose, developed its production processes to enable production of auxiliary products. As a result of the ongoing investment program the production capacity for specialty cellulose will increase to 255 000 tons per annum by the end of 2012. Complementary products include lignin and bioethanol. The company will complete the engineering study initiated in relation to the gasification project, GazEllen, which will be value adding.
 Specialty cellulose produced by Domsjö find primary end use in the textile segment (viscose staple fibre and viscose filament yarn). Around 25% of the production is used in non-textile applications, such as carrier in pharmaceutical tablets, thickening agents and in casings.
 Although Domsjö will become a strategic sourcing partner for the Aditya Birla Group’s expanding global viscose fibre production, Domsjö will continue to market and sell to third parties.
  “The acquisition of Domsjö Fabriker marks a significant milestone in our Viscose Staple Fibre (VSF) business”, comments Mr. Kumar Mangalam Birla, Chairman.
 “We look upon the VSF business as a core business that has a strong growth potential both in terms of revenues and earnings. Domsjö’s highly professional management team and their committed staff add value to this acquisition. I most warmly welcome them to the extended Aditya Birla family.”
 “As a large quality manufacturer of different viscose fibres, Domsjö’s products have a synergistic fit. We see great potential in further developing the company and its products. We are fully committed to its extensive investment program for 2012. Importantly, we plan to expand the research and development function at Domsjö as part of our global R&D efforts”, added Mr K.K Maheshwari, Director of the Companies.
 An impressive investment program in recent years, has enabled the company to attain even higher levels of performance. Additionally, its state-of-the-art biorefinery, with very high environmental standards, offers distinct advantages.

About Gregers Møller

Editor-in-Chief • ScandAsia Publishing Co., Ltd. • Bangkok, Thailand

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