The Aditya Birla Group, an $8-billion Indian conglomerate, said on Friday that it would invest $350 million in Laos to set up a plant for its viscose staple fibre business.

Grasim Industries, Thai Rayon Public Company of Thailand, and Indonesia-based PT Indo Bharat Rayon - all belonging to the Aditya Birla Group - will invest in the project as equity holders.

The investment will be made for setting up a project to raise pulp wood specie plantations and a pulp plant for the Indian group's viscose staple fibre business, said a company statement issued here.

The Aditya Birla Group has secured 50,000 hectares of land from the Laos government on lease for a 75-year period.

The project is to be implemented in two phases - first being the plantation phase and second the setting up of the dissolving pulp plant, added the statement.

The pulp produced in Laos would be exported to the group's rayon fibre manufacturing units in India, Thailand and Indonesia.

"This project with a 200,000 tonnes per annum capacity, is a forward step, planned ahead of time to ensure that our future expansion needs are met," said Kumar Mangalam Birla, chairman of the Aditya Birla Group.

"We will be requiring far larger quantities of pulp as our plans fructify. Our strategy to maintain our edge dictates the setting up holistic backward integration from the plantation to the final viscose stale fibre production."

Shailendra Jain, director of the group's pulp and fibre business, said Laos was at the take-off stage of economic growth and the entry was rightly timed to leverage the liberal foreign investment environment there.

Laos is also strategically located to support the group's rayon fibre manufacturing plans in the Southeast Asian region where the textile hubs are growing, he added.

The Aditya Birla Group's seven pulp and fibre plants span India, Thailand, Indonesia and Canada, with a collective capacity in excess of 775,000 tonnes per annum.

Source: www.hindustantimes.com