Published on: 7/5/2012 9:21:01 AM Print | Font Sizes:  Normal Text Large Text

Terrace Bay Pulp's future is in rayon

By: Northern Ontario Business staff

Terrace Bay pulp mill
Terrace Bay pulp mill

The Aditya Birla Group of India is the new owner of the shuttered Terrace Bay pulp mill.

The Ontario government is expected to make the announcement in Thunder Bay, July 5.

The Birla Group plans to pump more than $250 million in upgrades into the plant to enable the mill to dissolve wood pulp for rayon fibre.

The investment will create 275 mill jobs and 335 jobs in harvesting.

According to the Times of India, the purchase price is US $300 million.

The Aditya Birla Group is a Fortune 500 corporation with employees in 25 countries.

With rayon manufacturing operations in India, Indonesia and Thailand, it is the world's largest maker of viscose staple fibre. 'Birla Viscoe' is used in a wide variety of applications such as shirts, trousers, diapers, tissues, towels and bed linen

The Birla Group, which includes Grasim Industries, is considered a global leader in viscose stable fibre, and a Canadian subsidiary, the AV Group, operates two mills in New Brunswick and supplies markets with specialty pulp products to service the textile and paper industry.

The AV Group began with one operation in Atholville, New Brunswick in 1998 producing dissolving rayon grade wood pulp before acquiring another pulp mill at Nackawic.

Terrace Bay Pulp is under creditor protection until July 16.

With Ernst & Young as its monitor, the mill hasn't operated since an explosion last October that killed one employee, but improvements have been made under Ottawa's Green Transformation Program to attract a buyer.

The tranaction still has to receive court approval.

The mill was run by the Buchanan Group of Thunder Bay, which purchased the operation from Neenah Paper in 2006. It has a paper grade pulp capacity of 285,000 tonnes.

In a statement, group chairman Kumar Mangalam Birla said the conversion of Terrace Bay Pulp into a dissolving grade pulp mill is a “strategic move” that will provide “superior quality pulp” for the viscose staple fibre business.

Mike King, mayor of Terrace Bay, stated he was delighted to hear of the mill investment and thanked the province for “its efforts and leadership in making this opportunity a reality. On behalf of the community, I would like to welcome the Birla Group, who I am confident will find Terrace Bay and the northwest region a great place to work and live.”

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