Aditya Birla plans to expand AV Cell production capacity
05 Dec '07
2 min read
Aditya Birla announced that it will be investing $15 million CDN of added capitalization to AV Cell and increase its share holdings from 50 per cent to 75 per cent as part of its production capacity expansion plans.
The announcement was made in conjunction with the government of New Brunswick who pledged a term loan of $17.3-million to assist with facility upgrades.
"Aditya Birla's continued confidence in AV Cell in conjunction with the New Brunswick government's supportive business climate bodes well for the viability of the site," said Peter Vinall, President and Chief Executive Officer, AV Group. "AV Cell has excellent long-term potential and today's announcements will allow us to invest in the necessary upgrades and efficiencies to succeed and prosper in the years to come."
The mill's ability to secure additional competitively priced wood was underlined as a critical factor for future expansion plans during the news conference.
"To remain competitive we must expand and we will need 25 to 30 per cent more wood from Crown and private lands to produce enough dissolving pulp to make these next upgrades feasible," said S.V. Sharda, Chief Operating Officer, AV Cell. "We are currently in discussions with the government and other key stakeholders to move forward as quickly as possible on this critical issue."
AV Cell, located in Atholville, NB, currently produces 330 metric tones per day of specialty grade dissolving pulp for the textile industry. The planned upgrade will increase production capacity to 360 metric tonnes per day of specialty grade dissolving pulp. AV Cell Inc. is a 75:25 joint venture between the Aditya Birla Group of India and Tembec of Canada.
The mill maintains 275 jobs and supplies mixed softwood and hardwood dissolving pulp for the group's global Viscose Staple Fibre (VSF) business.
AV Group also owns and operates a mill in Nackawic that is currently undergoing a $45 million CDN conversion from paper pulp to dissolving pulp. The conversion will be completed in March 2008. The two mills' production is exclusively for the Group's units in India, Thailand, Indonesia and China.
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