The proposed new owner of an idled pulp mill in northwestern Ontario says it would restart production of paper-grade pulp by October 2012, and gradually convert the mill to dissolving pulp.
It was announced in early July that Aditya Birla Group of India has signed an agreement in-principle to purchase the assets of Terrace Bay Pulp in Terrace Bay, Ont. The international company will establish AV Terrace Bay Inc. (Canada) to complete the purchase. An Aditya Birla subsidiary, Grasim Industries Ltd., proposes to hold a 40% stake in AV Terrace Bay, while the remaining 60% would be held by another subsidiary, Thai Rayon Public Co. Ltd. of Thailand. According to a company press release, Grasim would be contributing $44 million over a period of the next three years, out of the total equity contribution of $110 million.
The transaction is subject to court approvals in Canada and other regulatory approvals in Canada, Thailand and India. It is expected to close by July 31, 2012.
The new owner will be investing more than $250 million in a phased manner to convert the mill to produce 280,000 tonnes per year of dissolving grade pulp. Until the conversion, which is likely to happen in fiscal 2016, the mill will produce and sell paper grade pulp. Aditya Birla expects the pulp mill to restart by October 2012.
The Aditya Birla Group has a significant presence in Canada, including two dissolving pulp mills in New Brunswick, AV Nackawic and AV Cell.