Leading cement maker UltraTech Cement Ltd on Thursday said its board has approved the investment of 12,886 crore to add 22.6 MTPA (million tonnes per annum) capacity to its total production, with a mix of brownfield and greenfield expansion.
The capacity expansion will be done at a cost of $76 per tonne of cement.
In a meeting held on Thursday, the board of the Aditya Birla Group firm approved the expansion plans, according to UltraTech Cement regulatory filings.
“The Board of Directors in its meeting held today approved Capex 12,886 crore towards increasing the capacity to 22.6 MTPA with a mix of brownfield and greenfield expansion,” the company said.
UltraTech said the investment, which will complement the company’s “future growth,” will be funded through a mix of debt and internal sources.
“This will be achieved by setting up integrated and grinding units as well as bulk terminals. Additional capacity will be created across the country.”
UltraTech said commercial production from these new capacities is expected to start in a phased manner by FY25.
At present, UltraTech has a production capacity of 119.95 MTPA and after the completion of the sanctioned expansion along with the existing expansion programmes, which is expected to be completed by FY23, it will increase to 159.25 MTPA.
“Upon completion of the latest round of expansion, the company’s capacity will increase to 159.25 MTPA, cementing its position as the world’s third largest cement company outside China.”
‘Significant milestone in UltraTech’s growth journey’
Kumar Mangalam Birla, Chairman, Aditya Birla Group said that this ambitious capacity expansion plan marks an important milestone in UltraTech’s transformational growth journey.
“The company has more than doubled its capacity in the last five years and is committed to meeting India’s future needs for housing, roads and other infrastructure. This investment will enhance India’s growth potential as well as a Backed by a strong belief in a deep and nuanced understanding of the market dynamics of the cement industry,” he added.
UltraTech has 22 integrated manufacturing units, 27 grinding units, one clinkerization unit and 8 bulk packaging terminals. It has a network of over one lakh channel partners across the country and has a market penetration of over 80 per cent.
Its closest rival was Holcim India, which, along with two Indian units – Ambuja Cements and ACC, has a jointly installed production capacity of 70 MTPA.
In May, the Swiss parent company of Holcim India signed a binding agreement with Adani Group to sell its business in India in a deal worth about $10.5 billion.