New investment will significantly boost sustainable fibre production and strengthen India’s position in the global man-made cellulosic fibre market.
Grasim Industries, the flagship company of the Aditya Birla Group, has approved a fresh investment of ₹3,094 crore to expand its Lyocell fibre manufacturing capacity at its Harihar facility in Karnataka. The expansion forms part of the company’s long-term strategy to meet the rising global demand for sustainable and high-performance textile fibres.
The Phase II project will add 110,000 tonnes per annum (TPA) of Lyocell capacity through two production lines of 55,000 TPA each. The first line is scheduled to become operational in 2028, while the second is expected to commence production by 2030.
This expansion builds on the company’s ongoing Phase I Lyocell project at the same location, which will add 55,000 TPA and is expected to be commissioned by mid-2027. Once both phases are completed, Grasim’s total Lyocell production capacity will approach 210,000 TPA, placing the company among the world’s leading producers of the sustainable fibre.
Lyocell, a next-generation cellulosic fibre derived from renewable wood pulp, is widely used in apparel, home textiles, and technical textile applications. Produced through a closed-loop manufacturing process, the fibre is valued for its softness, durability, breathability, and lower environmental footprint compared to conventional textile materials.
The investment is expected to further strengthen Grasim’s specialty fibre portfolio, which includes Lyocell, Modal, dope-dyed fibres, and recycled fibres. By 2030, specialty products are projected to account for around 35% of the company’s overall fibre portfolio.
The capacity expansion also aligns with broader industry trends favouring sustainable textile solutions and is expected to help Grasim surpass one million tonnes per annum of total cellulosic fibre capacity by the end of the decade. The move reinforces the company’s commitment to innovation, sustainability, and leadership in the global man-made cellulosic fibre sector.