Rayon is a cellulose fiber that is made from natural sources of cellulose, such as wood, bamboo or related agricultural products. On May 3rd, 1958 the Birla group signed an agreement with the Kerala government to set up a Rayon Grade wood pulp factory with a capacity of 100 tonnes per day in the Nilambur-Beypore area in the District of Calicut. This agreement commited the government to supply 1,60,000 tonnes of bamboo per year to the company at a rate of only Rs.1 per tonne of bamboo (the prevailing market price of bamboo was Rs 2000 per tonne). It gave the company exclusive rights and license to extract any bamboo from contract areas which initially was the Nilambur Valley. If additional bamboo was required, it also had the right to fell and remove it from other areas in proximity to the Contract Areas. The capacity of the plant also increased in a few years and it later also began producing Viscose Staple Pulp and other chemicals required to use in the plant. Through subsequent Supplementary Agreements, the commitment was increased and more forests were opened up for the company, and by 1984 practically all of the state’s forest tracts were made available for the extraction of Bamboo (and later Eucalyptus). The government assured the people that the establishment of a company on the banks of Chaliyar (the fourth longest river in Kerala, 169 km) would usher an age of development and salaried employment. The factory started functioning in 1962.