‘Vote of confidence in India’: Grasim announces ₹3,094 crore investment to expand sustainable fibre capacity

Grasim Industries, the flagship company of the Aditya Birla Group, on Monday announced an investment of ₹3,094 crore to expand its Lyocell fibre capacity at Harihar in Karnataka. The move is aimed at strengthening its push into sustainable textile materials.

The Phase II expansion will add 110,000 tonnes per annum (TPA) of Lyocell capacity through two production lines of 55,000 TPA each. The first line is expected to be commissioned in 2028, while the second is slated for completion in 2030, the company said in a statement. 

The new investment will complement Grasim’s Phase I Lyocell plant of 55,000 TPA currently under construction at Harihar, which is expected to be commissioned by mid-2027.

Once all phases are completed, Grasim’s total Lyocell capacity will reach nearly 210,000 TPA, making it one of the largest Lyocell producers globally.

Announcing the expansion, Aditya Birla Group Chairman Kumar Mangalam Birla said the investment reflects confidence in India’s long-term manufacturing potential.

“The Aditya Birla Group has always demonstrated the willingness to invest ahead of the curve in sectors that will define India’s future competitiveness and economic resilience. This investment carries forward that legacy,” he said.

Calling the project “a vote of confidence in the scale and promise of the Indian market”, Birla said the expansion aligns with the Make in India initiative and would help strengthen India’s position in the global textile industry.

He added that the project marks another step in Grasim’s strategy to expand advanced fibre capabilities amid growing demand for sustainable and high-performance textile materials.

“This fresh expansion will catapult Grasim’s overall Cellulosic Fibres capacity beyond 1 million tonnes per annum, reinforcing its position as a global leader in sustainable Man-Made Cellulosic Fibres (MMCF),” Birla said.

Vadiraj Kulkarni, Business Head of Grasim Pulp & Fibre, said the investment would strengthen the company’s position in the evolving MMCF market.

“By expanding Lyocell capacity, we are accelerating the shift towards high-performance fibres with a lower environmental impact. Lyocell enhances our product mix, supports premium applications, and aligns with our focus on delivering differentiated, sustainable solutions to global markets,” he said.

Lyocell is a next-generation fibre used across apparel, home textiles and technical textile applications. Manufactured through a closed-loop process, it is known for durability, breathability, comfort, and lower environmental impact.

The expansion is expected to strengthen Grasim’s specialty fibre portfolio. The company said the share of specialty products, including Lyocell, Modal, Dope-dyed and Recycled fibres, is expected to rise to 35% by 2030.