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The Aditya Birla group plans to set up a joint venture with a speciality chemical company in Indonesia. The Birla group had forayed into Indonesia in 1973 by setting up PT Elegant Textiles, now the largest producer of rayon spun yarn in the world with a 10 per cent share of the global market.
Sources close to the development said the Aditya Birla group and Indonesia's state-owned plantation company PT Perkebunan Nusantara were in talks to set up a $100 million (over Rs 430 crore) plant.
"Representatives of both the parties have had several rounds of meeting. Both the parties are interested to form a joint venture for oleo-chemicals. However, it may take some time for them to sign the deal," said a source. An Aditya Birla group spokesperson declined to comment.
Sources said the plant would have an initial capacity of 350,000 tonnes that would be increased later. They added that almost 30 per cent of the investment would be funded by equity and the rest by loans.
The proposed joint venture will be the AV Birla group's fifth initiative in Indonesia. Other ventures are PT Indo Bharat Rayon, a viscose staple fibre maker; PT Indo Liberty Textiles manufactures, a synthetic spun yarn producer, PT Sunrise Bumi Textiles, a yarn maker; and PT Indo Raya Kimia, producer of carbon disulfide.
A $6.5 billion conglomerate, the Aditya Birla group earns more than 30 per cent of its revenue flow from its global operations. It has 66 manufacturing units in India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China.