Grasim Industries to invest Rs 2,600 crore in capex in FY22

Company to invest Rs 5,000 cr in paint business over three years

Aditya Birla group firm Grasim has earmarked over Rs 2,600 crore as capital expenditure (capex) for financial year 2022 in the Viscose Staple Fibre (VSF) business. This will in addition to  company’s earlier announcement that it will invest of Rs 5,000 crore in its paint business over three years.
 

"We are currently in the process of carefully identifying plant sites that are close to consumption hubs for the paint business," Aditya Birla group chairman Kumar Mangalam Birla said while addressing the company's shareholders.

Like other top conglomerates, the group is also investing in renewable energy businesses. "Our solar power business contains a portfolio of solar assets across the states with the cumulative installed capacity at 502 Mw in FY21. We have tripled our capacity in the past two years, aided by the Group’s focus on increasing the share of the renewable power mix in each of our large ABG businesses," Birla said. The cumulative installed capacity is expected to rise to 845 Mw by FY23 based on the current pipeline, Birla said.

On its VSF business, Birla said trial production has started at the new brownfield vilayat project and with this Vilayat will become one of the largest single-location VSF facilities in the world with state-of-the-art technology delivering world-class fibre to Indian spinners.

"This expansion will increase Grasim’s VSF capacity by about 40 per cent, which will cater to the growing demand for sustainable man made cellulosic fibres in the country," Birla said.

The Vilayat expansion project entailed an investment of over Rs 3,500 crore and the capacity utilisation of the business recouped from single digit utilisation levels to full utilization levels towards the end of the year, Birla said.

"In the long term, the endeavour will be to enhance our value added products portfolio to create a meaningful speciality chemicals segment in Grasim. Our aim is to increase the share to 40 per cent for both VSF and chlorine value-added products by 2025," he said.

Earlier Birla had also announced a capex of up to $3 billion in the next five years by Hindalco to increase its capacity in India and overseas. Part of the capex will be deployed by Hindalco subsidiary, Novelis Inc for its auto-finishing lines in the US and China as well as for rolling and recycling capacity expansion in Brazil.