Grasim Industries Approves ₹3,094 Crore Capex for Phase II Lyocell Capacity Expansion at Harihar, Karnataka
Grasim Industries Limited, the Aditya Birla Group flagship, has approved a capital expenditure of ₹3,094 crore for Phase II expansion of its Lyocell fibre manufacturing capacity at Harihar, Karnataka. The board approved the investment on June 8, 2026, with financing to be sourced from a combination of internal accruals and borrowed funds.
The Phase II expansion will add 110,000 tonnes per annum (TPA) of Lyocell capacity through two production lines of 55,000 TPA each. The first line is targeted for commissioning by mid-2028, and the second by mid-2030. Each line will have a production rate of 150 tonnes per day.
The Phase II investment builds on Grasim's ongoing Phase I Lyocell plant at the same Harihar site, which carries a capacity of 55,000 TPA and is currently under construction with commissioning expected by mid-2027. Phase I was approved by Grasim's board in February 2025 at a capex of ₹1,350 crore. Combined, the Phase I and Phase II additions at Harihar will account for 165,000 TPA of new Lyocell capacity.
Upon full commissioning of both phases, Grasim's total Lyocell capacity will reach approximately 210,000 TPA, placing it among the largest Lyocell producers globally. The broader expansion will also push Grasim's total cellulosic fibres capacity beyond one million tonnes per annum. The company markets its Lyocell products under the Birla Excel brand. Lyocell is a third-generation cellulosic staple fibre used across apparel, home textiles, and technical textile applications, and is positioned as a sustainable alternative to conventional synthetic fibres.