India’s largest cement company Ultratech Cement Ltd will invest ₹1500 crore in capital expenditure this fiscal despite the constraints of an ongoing pandemic, Kumar Mangalam Birla, Chairman, said at the annual shareholder meeting today. With a slew of acquisitions made in the last two years, Ultratech’s global capacity is now 114.8 million tonnes per annum and is the is the only company to have a capacity of over 100 million tonnes in a single country, outside of China.
“The company has planned total capex cash outlay of ₹1,500 crore for a range of key initiatives,” Birla said. “These include installation of 66 MW of waste heat recovery systems (WHRS), 1.2 million tonnes per annum brownfield cement capacity addition in West Bengal and Bihar, pending work for phase 2 of the Bara grinding unit in Uttar Pradesh, coal block development in Madhya Pradesh, new Ready Mix Concrete plants and other plant upkeep capex. With these expansion plans, your company’s consolidated cement capacity will stand augmented to 118 million tons per annum and green power capacity will increase to 185 MW for Waste Heat Recovery Systems and over 350 MW for solar and wind power.”
Ultratech recorded net revenues of $ 5.94 billion (Rs. 42,125 crores) and operating profit of $1.40 billion (Rs. 9,930 crores) during 2019-2020.
The cement industry, after witnessing a healthy demand growth of ~ 13% in 2018-19, exhibited a decline in growth in FY20, Birla said. “Cement demand was sluggish during H1FY20 exacerbated by the general economic slowdown. The second half of the fiscal witnessed extended monsoons, low capital expenditure on infrastructure and road activities, along with financial stress in the NBFC and housing sectors. The improving demand situation since December 2019 could not be sustained, with the outbreak of covid-19.”
With the Indian economy expected to contract during FY21, Birla said he was confident that the economy will revert to the 6 to 8% growth trajectory in the next fiscal.
News Source: Livemint