Mumbai, June 2026: Grasim Industries Limited, the flagship company of the Aditya Birla Group and a global leader in cellulosic fibres, has announced a fresh investment of ₹3,094 crore to expand its Lyocell fibre production capacity at its Harihar facility in Karnataka.
The investment will support the development of Phase II of the Lyocell project, adding 110,000 tonnes per annum (TPA) through two production lines of 55,000 TPA each. The first line is scheduled for commissioning in 2028, while the second line is expected to become operational by 2030.
The expansion comes in addition to the Phase I Lyocell facility of 55,000 TPA, which is currently under construction at the same site and is expected to be commissioned by mid-2027. Upon completion of both phases, Grasim’s total Lyocell production capacity will reach nearly 210,000 TPA, positioning the company among the world’s largest Lyocell fibre manufacturers.
Strengthening India’s Sustainable Textile Ecosystem
Announcing the investment, Kumar Mangalam Birla, Chairman of the Aditya Birla Group, said the expansion reflects the group’s long-standing strategy of investing ahead of market trends and supporting India’s manufacturing ambitions.
He noted that the investment aligns closely with the government’s Make in India initiative and will contribute to strengthening India’s competitiveness in the global textile and apparel value chain. The move is also expected to enhance the country’s position in the rapidly growing market for sustainable textile materials.
Birla added that the expansion would push Grasim’s overall Cellulosic Fibre capacity beyond 1 million tonnes per annum by 2030, further reinforcing its leadership in the global Man-Made Cellulosic Fibre (MMCF) sector.
Growing Demand for Sustainable Fibres
According to Vadiraj Kulkarni, Business Head of Grasim Pulp & Fibre, the investment supports the company’s strategy to increase its presence in high-value, environmentally responsible fibre segments.
He emphasized that Lyocell is becoming increasingly important in the evolving MMCF landscape due to its superior performance characteristics and lower environmental footprint. The capacity expansion will help Grasim meet rising global demand while strengthening its portfolio of specialty fibres.
Lyocell Gains Momentum Across Textile Applications
Lyocell is widely recognized as a next-generation fibre used in apparel, home textiles, and technical textile applications. Produced through an efficient closed-loop manufacturing process, the fibre offers advantages such as durability, softness, breathability, moisture management, and sustainability.
With increasing focus on eco-friendly materials across global fashion and textile supply chains, Lyocell has emerged as one of the fastest-growing fibre categories in the industry.
The new investment will significantly enhance Grasim’s specialty fibre portfolio, which includes Lyocell, Modal, Dope-Dyed Fibres, and Recycled Fibres. The company expects specialty products to account for approximately 35% of its total fibre portfolio by 2030.
Supporting Future Growth
Industry experts view the expansion as a strategic move to capitalize on growing demand for sustainable and high-performance fibres while supporting India’s ambitions to become a major global hub for advanced textile manufacturing.
As sustainability becomes a key purchasing criterion for global brands and retailers, investments in innovative fibres such as Lyocell are expected to play a critical role in shaping the future of the textile industry.