Mumbai: Aditya Birla Group's textile and chemical arm, Grasim Industries, will be spending Rs.1,500 crore over the next two years on expanding its business in chemicals as well as VSF (viscose staple fibre) as the company foresees demand picking up.
“Our plants are running at full capacity and therefore, we will be making some investments in the next two years to cater to the rising demand,” Dilip Gaur, managing director of Grasim Industries told ET, in an interview after the companies announced their June quarter results on Monday.
Out of the total Rs.1,500 crore, Rs.750 crore will be spent on expansion of the chemicals plant while another Rs.750 crore will be spent on expanding the VSF business.
Apart from the expansion plans, the company that has major divisions of VSF, caustic soda and allied chemicals, would also be spending Rs.125 crore on debottlenecking of its VSF facilities.
Gaur foresees demand for VSF rising going forward as the company partners more with the textile value chain as well as spread its retail presence through its brand Liva. Caustic soda, which the company uses partly for its own VSF production, is expected to see more uptake from the alumina and textile industries.
Rs.750 crore will be spent on expansion of chemicals plant while an equal amount will be spent on expanding VSF business.
At its chemical business, the company is also undertaking a brownfield expansion at its plant in Vilayat in Gujarat, which will take its capacity from 840 KTPA to 1140 KTPA when the plant gets commissioned in Q4FY18. It will also place greater thrust towards more value-added products that promise better returns.
The company's cement division UltraTech also carried out a major inorganic expansion in June when it completed its acquisition of six integrated cement plants of Jaypee Associates which took its capacity to 93 million tonnes per annum, making it the world's fourth largest cement player.