An investigation of the application of a multi scale CAFE model to prediction of the strain localization phenomena in industrial processes, such as extrusion, is presented in this work. Extrusion involves the formation of a strong strain localization zone, which influences the final product microstructure and may lead to a coarse grain layer close to the surface. Modelling of the shape of this zone and prediction of the strain magnitude will allow computer aided design of the extrusion process and optimisation of the technological parameters with respect to the microstructure and properties of the products. Thus, the particular objective of this work is comparison of the FE and CAFE predictions of strain localization in the shear zone area in extrusion. Advantages and disadvantages of the developed CAFE model are also discussed on the basis of the simulation results.