Grasim Industries Sanctions Rs 3,094 Crore Investment for Lyocell Capacity Expansion in Karnataka
Grasim Industries Ltd has announced a significant investment of ₹ 3,094 crore aimed at expanding its Lyocell capacity through Phase II development at Harihar, Karnataka. This strategic capital expenditure is set to substantially boost the company's production capabilities, positioning Grasim as a major player in the global sustainable fibre industry.The expansion plan involves adding 110K TPA (Tons Per Annum) of Lyocell production. This additional capacity will consist of two lines, each rated at 55K TPA and equivalent to 150 Tons per day. The commissioning timeline for these new units is phased: the first line is expected by mid-2028, while the second line is slated for completion by mid-2030.
This Phase II addition complements the ongoing Phase I Lyocell plant at Harihar, which currently stands under construction and is projected to be commissioned by mid-2027 (55K TPA). When combined with existing capabilities and the new phases, Grasim's total Lyocell capacity is expected to approach 210K TPA.
Capacity and Investment Overview
The following table provides a detailed look at the current operational status and the proposed expansion plans:| Metric | Detail |
|---|---|
| Existing CSF Capacity | 890K TPA (Cellulosic Staple Fibre) |
| Current Utilization Rate | 97% (FY 2026) |
| Phase II Proposed Addition | 110K TPA (Consisting of 2 lines at 55K TPA each) |
| Total Projected Lyocell Capacity | Nearly 210K TPA |
| Investment Required | Rs 3,094 Crore |
The investment is planned using a combination of internal accruals and borrowed funds. The rationale behind the expansion is to participate in the growing global demand for sustainable and high-performance textile materials.
Strategic Imperative and Market Positioning
Leaders within the Aditya Birla Group highlighted that this investment underscores the group's commitment to backing sectors crucial for India's future competitiveness, aligning with the aspirations of Make in India. This move reinforces Grasim’s strategy to cater to the global demand for advanced, sustainable fibre materials.Mr Vadiraj Kulkarni, Business Head of Grasim Pulp & Fibre, stated that the expansion strengthens the company's standing in the evolving Man-Made Cellulosic Fibres (MMCF) landscape. By expanding Lyocell capacity, Grasim is accelerating its transition toward higher performance fibres with a reduced environmental footprint.
The enhancement of the product mix through this expansion will increase Grasim’s specialty portfolio share—which includes Lyocell, Modal, Dope-dyed, and Recycled fibres—to 35% by 2030.
Lyocell, described as a versatile next-generation fibre, is used across apparel, home textiles, and technical applications. Manufactured via an efficient closed-loop process, it offers durability, comfort, breathability, and a lower environmental impact, thereby strengthening the company’s portfolio in the global sustainable fibre industry.
GRASIM Stock Price Movement
Shares of Grasim Industries Limited shed 0.89% today, finishing at ₹3050.1 as trading closed.The stock traded within an intraday range between a high of ₹3099.9 and a low of ₹3034.9.
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