Grasim Industries has approved a ₹3,094 crore investment to expand its lyocell fibre manufacturing capacity at its Harihar facility in Karnataka. The project is a key part of the company’s strategy to become a global leader in sustainable textile fibres and increase its overall cellulosic fibre capacity beyond 1 million tonnes per annum (TPA) by 2030.
Capacity Expansion Roadmap
The expansion will be executed in phases at the Harihar plant.
| Phase | Capacity Addition | Expected Commissioning |
|---|---|---|
| Phase I | 55,000 TPA | Mid-2027 |
| Phase II – Line 1 | 55,000 TPA | 2028 |
| Phase II – Line 2 | 55,000 TPA | 2030 |
| Total Lyocell Capacity | 210,000 TPA | By 2030 |
Once completed, Grasim’s lyocell capacity will rise to approximately 210,000 TPA, significantly strengthening its global position in sustainable fibres.
What is Lyocell?
Lyocell is a premium, eco-friendly fibre manufactured from wood pulp using a closed-loop production process that recovers and reuses solvents.
Key Benefits
- Biodegradable and sustainable
- Lower environmental footprint than many conventional fibres
- Soft and breathable fabric characteristics
- Widely used in apparel, home textiles and technical textiles
As sustainability becomes a major focus for global fashion brands, demand for lyocell continues to rise across Europe, North America and Asia.
Strategic Importance for Grasim
Focus on Specialty Fibres
Grasim plans to increase the share of specialty fibres in its portfolio to 35% of total fibre production by 2030.
These include:
- Lyocell
- Modal
- Dope-dyed fibres
- Recycled fibres
Specialty fibres typically generate higher margins and face less commodity pricing pressure compared to traditional viscose staple fibre.
Supporting India’s Textile Manufacturing Ecosystem
According to Chairman Kumar Mangalam Birla, the investment aligns with India’s manufacturing ambitions and supports the government’s Make in India initiative.
Expected benefits include:
✔ Strengthening India’s position in global textile supply chains
✔ Increasing domestic production of advanced fibres
✔ Reducing import dependence for specialty textile materials
✔ Creating long-term industrial and employment opportunities
Why Harihar?
The Harihar facility in Karnataka has been one of Grasim’s key fibre manufacturing hubs for decades.
Advantages of expanding at Harihar include:
- Existing industrial infrastructure
- Skilled workforce availability
- Integrated operations
- Lower execution risk
- Operational efficiencies and cost advantages
Market Impact
Grasim Share Price Performance
On June 9, 2026:
- Closing Price: ₹3,096
- Gain: ₹45.90 (+1.50%)
- Intraday High: ₹3,109.50
- Market Capitalisation: Approximately ₹2.10 lakh crore
Investors reacted positively to the announcement, viewing the expansion as a long-term growth catalyst in the high-value sustainable fibre segment.
Key Takeaways
- ₹3,094 crore investment approved for lyocell expansion.
- Total lyocell capacity to reach 210,000 TPA by 2030.
- Supports Grasim’s target of exceeding 1 million TPA cellulosic fibre capacity.
- Focus on higher-margin specialty fibres.
- Strengthens India’s position in sustainable textile manufacturing.
- Positions Grasim among the major global lyocell producers.
Conclusion
Grasim Industries is making a significant long-term bet on sustainable textiles through its ₹3,094 crore lyocell expansion project. As global demand for environmentally friendly fibres continues to rise, the investment could help Grasim enhance profitability, diversify its product portfolio, and reinforce its leadership in the global cellulosic fibre market.
Disclaimer:
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