MUMBAI: Kumar Mangalam Birla, Chairman of Aditya Birla Group (ABG), on Monday announced the acquisition of leading Swedish specialty pulp and bio-refinery company, Domsjö Fabriker (Domsjoe Fabriker in English) for a sum of $415 million from a Swedish consortium.
“The enterprise value of Swedish pulp maker Domsjö Fabriker is $340 million. There has been an ongoing capex plan of $75 million, which will take our total investment to $415 million,” Birla told reporters here.
The buyout will be financed through 70 per cent of debt component and 30 per cent of internal accruals, he said.
He said that this acquisition, the fourth one in the pulp and fibre business, has been made through two of the group’s global companies Thai Rayon Public Company Ltd (Thailand) and Indo Bharat Rayon (Indonesia), and comes after the first two, Atholville Pulp Mill and the Nackawic Pulp Mill in New Brunswick, Canada and the third was the Jingwei Fibres Company Limited, in China.
Birla said that the acquisition will help ABG consolidate its global position in the pulp and fibre business. “The acquisition of Domsjö Fabriker, a world-class company, marks a significant milestone for our pulp & fibre business. Its high quality pulp will enable us to enhance the supply of top quality premium VSF to our customers and further strengthen our market position,” he said.
ABG is already reckoned as a marquee group in the viscose staple fibre business with over 21 per cent of the global market share. According to Birla, since this is one of ABG’s core businesses it’s the group’s aspiration to significantly ramp up global market share by the turn of the decade.
Commenting on the development, K K Maheshwari, head of pulp & fibre business, said that this acquisition was in line with ABG’s strategy of having a substantive part of specialty pulp for consumption through its own captive source. “With Domsjö Fabriker, we are closer to this goal,” he added.
While Ola Hildingsson, CEO of Domsjö Fabriker said that ABG brings a strong financial base and global presence to its operations strengthens Domsjoe’s position in the entire value chain. “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,” he added.