Grasim Industries has greenlit a Rs 3,094 crore capital expenditure to expand its Lyocell fibre production capacity at Harihar, Karnataka, signaling a decisive move to align with the global apparel industry’s migration toward high-performance, circular materials. Involving addition of 110,000 tons per annum (TPA) of capacity, the project will be executed in two equal phases, with commissioning scheduled for 2028 and 2030. This initiative follows an ongoing 55,000 TPA construction project, ultimately positioning the Harihar site as one of the world's largest hubs for Lyocell - a third-generation cellulosic fibre renowned for its breathability, durability, and low-impact, closed-loop manufacturing process.
Securing feedstock for global apparel retail
The expansion is a direct response to the mounting pressure on fashion retailers to eliminate high-emission synthetics from their supply chains. With global Lyocell demand projected to sustain a steady growth trajectory - supported by the fibre’s versatility across luxury apparel, medical textiles, and activewear - Grasim aims to capture significant market share. "This investment reflects our intent to invest ahead of the curve in sectors that define India's future competitiveness, notes Kumar Mangalam Birla, Chairman, Aditya Birla Group . By scaling these specialized inputs, the company intends to increase the specialty segment’s share to 35 per cent of its total portfolio by 2030, directly serving global brands seeking verified, sustainable feedstock for their collections.
Balancing operational efficiency and market volatility
While the expansion underlines a long-term growth thesis, Grasim continues to manage the immediate realities of the textile sector. The company reported a 97 per cent capacity utilization rate in FY26, showcasing strong operational throughput despite ongoing margin pressures from global commodity pricing. The Harihar site is currently undergoing technology upgrades, including a new bleach plant and modernized evaporation systems, to further reduce freshwater consumption and chemical waste. Funded through a strategic mix of internal accruals and debt, this multi-phase development ensures that the company remains insulated from short-term market fluctuations while building the industrial infrastructure necessary to exceed 1 million TPA in total cellulosic fiber capacity by the end of the decade.
A global leader in MMCF and textiles
Grasim Industries, an Aditya Birla Group flagship, is a global leader in Man-Made Cellulosic Fibres (MMCF), chemicals, and textiles. It provides essential raw materials to the global fashion and apparel markets. The company focuses on scaling sustainable, high-value specialty fibres to support its 2030 premium product targets.
