The Aditya Birla Group has decided to put its viscose staple fiber plant project in Turkey on hold as the viscose market is in a state of turmoil and returns are low at the moment. The project is on but has been delayed because of the capacity overhang in China. Though demand for viscose staple fiber continues to grow globally, the overcapacity in China, created at the time of viscose boom, has put pressure on realizations in the global markets. It has resulted in global prices declining by around 15 per cent.

Announced in December 2011, the plant was to be the first viscose production facility in Turkey, and the investment to the tune of Rs 3,000 crores was aimed at supporting the growth of its textile industry. Viscose staple fiber is a raw material used for making home textiles and apparels. Turkey is the fourth largest consumer of viscose in the world.

While the facility was to address Turkey’s domestic demand, it would also have the potential to export about 20 per cent to the European Union and other neighboring countries. In December 2014, the Austria-based Lenzing Group, too, decided to abstain from any new capacity expansion projects until market conditions improved.