Grasim Industries, a part of the Aditya Birla Group has signed an agreement through AV Terrace Bay Inc, Canada, a SPV, to acquire the assets of the Terrace Bay Pulp Inc., a paper grade pulp mill in North America.
Grasim will be holding 40 per cent interest in the proposed SPV while Thai Rayon Public Co, Thailand will be holding the balance. Terrace Bay produces rayon grade pulp, a key raw material for making VSF. The purchase will give the Group additional pulp capacity at a time it is investing heavily in VSF to expand capacity to 1 million tonne from about 7,50,000 tonne.
Grasim will contribute $44 million (approx Rs 246.4 crore) of the Group's equity of $110 million (approx Rs 616 crore). The Group will also invest more than $250 million (approx Rs 1,400 crore) in a phased manner to convert the mill to produce dissolving grade pulp with a capacity of 2,80,000 tonne.