To tap the strong demand growth of VSF (viscose staple fibre) and maintain its leadership position, Grasim, a part of Aditya Birla Group, will increase its total VSF capacity by 58 per cent to 788 KTPA. This is in addition to the existing plan at the cost of RS. 802 cr. The company has also committed a fresh capex of Rs. 3,523 cr for capacity expansion. The net revenue of Grasim increased 24 per cent y-o-y for the third quarter of fiscal 2018 on the back of higher volumes and better realisation. The company’s EBITDA was recorded at Rs. 462 cr, up 15 per cent y-o-y in the third quarter of 2018. The domestic VSF market demand remained buoyant with sales volume up by 9 per cent y-o-y.

“The uptrend in domestic caustic soda prices continues in the current quarter, driven by supply related issues in China and Europe and robust demand from major consuming segments (alumina and textile),” Grasim said in a report. “The VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through brand Liva and enriching the product mix through a larger share of specialty fibre. The new capacities likely to come on stream in China may impact the global VSF prices in the near term,” the report added.

The demand for caustic soda in India is expected to grow with rising consumption from the alumina and textile sectors. The brownfield expansion of 144 KTPA caustic soda at Vilayat, Gujarat is expected to be commissioned by March 2018.