Aditya Birla Group acquired Domsjo Fabriker, a Swedish Speciality Pulp & Bio-refinery Company

The Aditya Birla Group on 18 April 2011 announced the acquisition of Domsjo Fabriker, a leading Swedish speciality pulp and bio-refinery company. The acquisition was made by the Birla Group through its global companies Thai Rayon Public Company (Thailand) and Indo Bharat Rayon (Indonesia) for a consideration of $340 million from a Swedish consortium of six individuals. This acquisition is in line with Birla’s strategy of having a substantive part of the Group’s specialty pulp for consumption through captive sources.

The acquisition will be 70 per cent debt-financed and 30 per cent coming from internal accruals. The enterprise value of the business is $340 million. $180 million will be raised on the two group companies while $160 million will be as debt in a yet-to-be named special purpose vehicle (SPV). The total investment by the Birlas will amount to $415 million and they will be pump in $75 million for the ongoing capital expenditure plan.

Domsjo’s cutting edge technology and production process coupled with a state-of-the-art bio-refinery, is expected to add significant value to Birla’s pulp and fibre operations. The high quality pulp will enable the Aditya Birla Group to enhance the supply of top quality premium viscose staple fibre (VSF) to the customers.

Following the acquisition, the Aditya Birla Group's VSF capacity that currently stands at 7.50 lakh tonnes, will go up to one million tonnes annually by 2013 with the completion of the Domsjo's expansion.

The Aditya Birla group is the world’s largest producer of VSF, with a 24 per cent global share.
The production capacity of the Domsjo which clocked revenue of $ 390 million last year, will be increased to 2.55 lakh tonnes by June 2012 from 2.1 lakh tonnes at present.