Grasim to expand Nagda unit, push up production

Grasim Industries Ltd, a flagship company of the Aditya Birla group, is going to expand its Nagda (near Ujjain) facility by setting up another unit with an investment of Rs 55 crore.

Nagda is its largest unit producing a wide range of viscose staple fibres (VSF) and has a combined installed capacity of 2,51,850 tonnes per annum. The new unit at Nagda will manufacture solvent spun cellulosic fibre, which is environment-friendly.

Sources revealed that the firm planned to produce 3,650 metric tones of solvent spun cellulosic fibre with the new investment.

"The firm has sought some concessions and sops, including 100 per cent investment assistance for 10 years instead of 7 years offered by the industry promotion policy. It has also demanded entry tax exemption for 10 years," according to a source.

The new unit will hardly produce any toxic waste. "It will use methyl morpholine oxide as a solvent, which is recyclable and non-toxic, and makes the product bio-degradable," said the source, adding, "Wood pulp will also be used in the manufacturing process."

The new unit, after clearance from the state government, is likely to come up by 2007.

The state government is yet to discuss the concessions to be granted to the project. The project is expected to generate 115 direct jobs. "The apex committee on investment promotion will discuss the project soon to give it a clearance," a senior official told Business Standard.

The Aditya Birla group is known for its cost effective VSF operations. Grasim's installed capacity of VSF was increased by 3,650 tonnes to 257,325 tonnes an annum during the third quarter of FY 2006. Its sales volumes rose by 18 per cent.

The company is learnt to have planned capacity expansion and modernisation of its VSF plants with a total capital outlay of over Rs 533 crore to increase VSF capacity to 3,06,950 tonnes per annum from its current level of 2,57,325 tonnes.