PRESS RELEASE

1 November 2006

A win-win situation for Aditya Birla Group and Hubei Jingwei

The Aditya Birla Group, a leading multinational Corporation, headquartered in India, and Fujian Jingwei Group, a renowned Chinese textile corporation, today inaugurated Birla Jingwei Fibres Company Limited, their new joint venture company in China.

Addressing colleagues at the new company, Dr. Kumar Mangalam Birla, Chairman of the
$8.5 billion Aditya Birla Group said in a video that he felt very proud of this new JV.

In the words of Dr. Birla, "Our new company — Birla Jingwei Fibres — in which we have made a strategic investment, having taken in a 70 per cent equity, is a major milestone for us in China. The Chinese as a people have indeed a lot of commonalities with us in India. We are both a hardworking, committed people with passion. This has been our experience when we acquired the Liaoning Carbon Black Company. So when we were looking at a foothold in China for our viscose staple fibre, we could not have had a better partner than the Fujian Jingwei Group. There is a tremendous synergy between the Jingwei Group's strong presence in the textile spinning sector and our Group's dominance in the VSF business. This unique combination undoubtedly results in the achievement of benchmark levels of operational efficiency and world-class product quality".

In Dr. Birla's view, the Asian and Chinese markets offer tremendous potential for commodity and specialty fibres in both of which the Aditya Birla Group has a solid foundation. Buoyant about these sectors, Dr. Birla stated, "We are expanding in both these segments. We have great plans for the growth of this new company. Apart from the privilege of servicing Fujian Jingwei Group as a captive customer and the Chinese domestic market, we must think of taking our products and services to global markets. While plans are afoot to ramp up the capacity from 30,000 to 60,000 tonnes in the first phase, by the turn of the decade we should scale up and explore a quantum leap. I believe Birla Jingwei can soon become the leading VSF manufacturing operation in China."

Dr. Birla also briefly shared the Group's values and its meritocratic work culture. The Group's talent management processes and growth opportunities would be equally accessible to all of Birla Jingwei employees. The Aditya Birla is an equal opportunity employer, commented Dr. Birla.

Subsequently, Mr. Shailendra Jain, the Group's Director, and its Global Business Head for the fibre and pulp business, termed the inauguration of Birla Jingwei, as "a memorable milestone". Said Mr. Jain, "The cooperation between Jingwei and Birla Group is a win-win situation for both the organisations. The JV will be able to leverage on Aditya Birla Group's rich experience and dominance in VSF and dissolving grade pulp production and Jingwei Groups' substantial presence in yarn spinning. Most importantly, Jingwei Group as a partner provides robust credentials to forge ahead with customers. We have great plans going forward. For us in the Aditya Birla Group, the viscose staple fibre business is a core business that has significant growth potential in revenues and earnings. Today, the Aditya Birla Group commands 22 per cent of the global market share. Our aspiration is to ramp up our global market share significantly in which we would expect Birla Jingwei to play an important role".

Mr. Jain specially acknowledged the support received from Mr. Lin Mei Zhuo, Wang Dunrong, Chen, their transparent and friendly approach which was a great source of encouragement. He also thanked several officials of Xiangfan City particularly M/s Li Debing, Mayor, Xiangfan People's Government, Tian Chengzhong, Secretary and Chairman Xiangfan, the Committee of Communist Party of China, Yu Guoqi, Vice Mayor. He was very impressed by their zeal and their commitment for increasing industrialisation in this beautiful city. He hoped this JV will continue to get their total backing in every matter including expansion plans.