The Aditya Birla Group’s initiative to achieve complete backward integration for its VSF business has resulted in further expansion and consolidation of its pulp capacities. Accordingly an investment of US$ 350 million has been planned in the Lao People’s Democratic Republic (Laos) for setting up of a project to raise pulp wood species plantations and a pulp plant for the viscose staple fibre (VSF) business.

The Group companies namely, Grasim Industries Limited, India; Thai Rayon Public Co. Limited, Thailand; and PT Indo Bharat Rayon, Indonesia are equity holders in the new venture —- Birla Lao Pulp & Plantations Company Limited, established in June 2006.

The Government of Laos has approved 50,000 hectares of land for this project. Eucalyptus plantations will be raised on this land to provide the feed for the pulp plant. Eucalyptus plantations normally have a growth cycle of seven years and the plantation would be done at the rate of 7000 hectares per annum.

The project is to be implemented in two phases, first the plantation phase and second, the setting up of the dissolving pulp plant with a capacity of 200,000 tonnes per annum. The commissioning of the pulp plant would coincide with the harvest of the first plantation in the seventh year i.e. 2014.