Grasim Industries has received green nod for expanding the production of manmade fibre VSF at Bharuch, Gujarat that would entail an investment of Rs 2,560 crore, according to an official document.

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The company has four VSF (Viscose Staple Fibre) plants in India, of which two are located in Gujarat, one each in Kharach and Vilayat in Bharuch district.

As per the proposal, the company's Grasim Cellulosic Division wants to expand its Vilayat plant.

In a letter issued to the Grasim Industries, the Union environment ministry has said it has given the environment clearance to the company's proposal on expansion of Vilayat unit subject to compliance of certain conditions.

The company's proposal is to increase the production capacity of VSF from 1,27,750 tonnes per annum (TPA) to Rs 2,55,500 TPA. It also wants to set up a production facility of Solvent Spun Cellulosic Fibre with a capacity of 36,500 TPA.

Besides, the company has proposed to expand the production capacity of Sulphuric Acid from 1,02,300 TPA to 1,82,500 TPA, Carbon Di-Sulphide from 23,725 TPA to 34,675 TPA and captive power plant capacity from 25 MW to 55 MW.

Grasim Industries will undertake the proposed expansion within the existing plant premise spread over 222.63 hectare area at Vilayat.

The project cost is estimated to be Rs 2,560 crore and will create about 2,500 jobs, according to the letter.

In its proposal, the Aditya Birla Group firm has said the proposed expansion in VSF production capacity will cater the increased demand of manmade fibres in the country.

Among major staple fibres, VSF will have better growth due to perfect fit for the higher growing categories in apparel retail segments like women and kids wear, it added.