Mumbai: The Aditya Birla Group, controlled by billionaire Kumar Mangalam Birla, is investing $260 million (Rs1,150 crore) to expand a textile fibre capacity and meet rising global demand for casual fabrics, a group official said on 30 March.
The expansion includes diversified Grasim Industries Ltd, which will spend about Rs300 crore ($69 million), and unlisted group companies in Thailand, Indonesia and China.
The group aims to raise the capacity of viscose staple fibre, a raw material for fabrics, to 727,000 tonnes a year by the December quarter from 566,000 tonnes now, group director for pulp business Shailendra Jain said.
There has been a change in consumer preference for cellulosic fabric in the last few years after demand remained stagnant in the 1990s, he said.
“There is a strong indication that consumers want more casual look,” Jain said. “It’s changing because of the lifestyle products.”
Most of Grasim’s investment will be funded from internal accruals, he said.
The fibre unit was a drag on Grasim’s earnings for many years in the 1990s and many analysts had urged the cement-to-textiles firm to spin off the unit to improve financial ratios.
The fortunes of the unit improved in the last few years and has contributed positively to earnings.
Jain said the expanded capacity would start production after the July-September quarter, and immediately add to earnings of Grasim.