Raj Rayon Industries Ltd has approved a Rs 650 crore Phase II expansion programme to increase its polyester yarn manufacturing capacity and strengthen its presence in value-added, specialty and sustainable polyester products.

The expansion will involve adding 300 tonnes per day of polyester yarn capacity and 50 tonnes per day of recycled polyester yarn capacity at the company’s existing integrated facility in Silvassa. The project is expected to be commissioned in CY2028.

As a brownfield expansion, the project will utilise existing land, utilities and evacuation infrastructure, which the company expects will lower capital costs and shorten the execution timeline.

Upon stabilisation, FY29 is expected to be the first full year of commercialisation, with the company targeting peak annual revenue potential of around Rs 2,700-3,000 crore. Value-added, specialty and sustainable products are expected to contribute around 80% of revenue at peak utilisation.

The company is also expanding downstream capabilities, with around 10 TPD of fabric production targeted to commence in Q3 FY27 and a doubling of its Value-Added Dope-Dyed Yarn capacity expected during the same period.

The proposed recycled polyester facility will support Raj Rayon’s backward integration into recycled yarn manufacturing. The company also plans to expand into technical textiles and specialty performance yarns for applications including geogrids, seat belts, agritech, industrial packaging, sportswear and premium fabrics.

As part of its sustainability initiatives, Raj Rayon plans to commission a Rs 25 crore biomass heating system by December 2026, replacing furnace oil with agricultural residue and biomass. The company also aims to meet nearly 50% of its electricity requirements through solar generation, supporting lower energy costs and emissions.