Grasim Industries, the flagship company of the Aditya Birla Group, has announced an investment of ₹3,094 crore to expand its lyocell fibre manufacturing capacity at its Harihar facility in Karnataka.
The investment is part of the company's long-term strategy to strengthen its position in sustainable fibres and increase its overall cellulosic fibre capacity beyond 1 million tonnes per annum (TPA) by 2030.
Under Phase II of the project, Grasim will add 110,000 TPA of lyocell capacity through 2 new production lines of 55,000 TPA each.
The first production line is expected to become operational in 2028, while the second is scheduled for commissioning in 2030.
This expansion is in addition to the Phase I project, a 55,000 TPA lyocell plant currently under construction at the same location, which is expected to start operations by mid-2027.
| 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 |
Lyocell is a sustainable fibre made from wood pulp through an environmentally friendly manufacturing process that recovers and reuses solvents.
The fibre is widely used in apparel, home textiles and technical textile applications. It is considered more sustainable than conventional fibres due to its lower environmental impact.
Growing demand for eco-friendly textiles has increased the popularity of lyocell among global brands and consumers, particularly in Europe and North America.
Chairman Kumar Mangalam Birla said the investment reflects confidence in India's growth potential and aligns with the government's "Make in India" initiative.
According to the company, the expansion will help strengthen India's position in the global textile value chain and enhance domestic manufacturing of advanced textile materials.
Grasim plans to increase the contribution of speciality fibres such as lyocell, modal, dope-dyed and recycled fibres to 35% of its total fibre production by 2030.
These products generally offer better margins and higher value compared to traditional viscose staple fibre, which has been the company's core fibre business for many years.
The shift towards speciality fibres is expected to improve product diversification and reduce dependence on commodity-driven segments.
Once the planned expansions are completed, Grasim's lyocell capacity will reach approximately 210,000 TPA, making it one of the major players in the global lyocell market.
The company believes large-scale domestic production can provide cost and logistics advantages for textile manufacturers while supporting the growing demand for sustainable textile solutions worldwide.
The Harihar facility in Karnataka's Davangere district has long been Grasim's key fibre manufacturing hub.
By expanding capacity at an existing location, the company can benefit from established infrastructure, skilled workforce and operational efficiencies.
Grasim Industries share price (NSE: GRASIM) ended the session at ₹3,096 on June 9, 2026, up 1.50% or ₹45.90 from the previous close. During the day, the stock opened at ₹3,070.20 and touched an intraday high of ₹3,109.50, while the day's low stood at ₹3,067.80. The company commanded a market capitalisation of approximately ₹2.10 lakh crore and traded at a price-to-earnings (P/E) ratio of 42.34.
Grasim Industries' ₹3,094 crore investment in lyocell manufacturing highlights its focus on sustainable and high-value fibres. The expansion will significantly increase production capacity, strengthen India's textile manufacturing ecosystem and support the company's goal of crossing 1 million TPA in overall cellulosic fibre capacity by 2030.
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Published on: Jun 9, 2026, 7:42 PM IST
Kusum Kumari
Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.
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