Aditya Birla invests $15 million and increases holdings of AV Cell

    ATHOLVILLE, NB, Dec. 3 /CNW/ - Aditya Birla today 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
    "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
    "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 tonnes
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.

For further information:

For further information: Peter Vinall, President and CEO, AV Group,
(506) 575-3294, Cell.: (506) 260-2323

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