Ultratech Cement will invest Rs 11,000 crore to jack up its production capacity by 10 million tonnes per annum (mtpa) to 62 mtpa by the first quarter of 2013-14 fiscal.
"The company has a capital outlay of Rs 11,000 crore to be spent over the next three years ... Orders have been placed for major equipment. These expansions are expected to be operational by Q1 FY14," the company has said in a letter to the shareholders.
The company will use the proposed fund on clinkerisation plants through brownfield expansions at Chhattisgarh and Karnataka, installing waste-heat recovery systems, instituting bulk packaging terminal and setting up of ready-mix concerete plants.
"Upon completion of this round of capex, company's cement capacity will stand augmented by 10 mtpa to 62 mtpa, captive power from 504 MW to 674 MW and generation of green power through waste recovery from 4 MW to 65 MW," Ultratech said.
The capacity expansion was being funded through a mix of internal accruals and borrowings, it said, adding that it has spent over Rs 1,100 crore on various capex initiatives so far during the first half of the current fiscal.
Meanwhile, the company said the current surplus scenario in the domestic market was likely to continue for the next 2-3 years, but the growing input costs would squeeze margins.
"Over the long-term, the sector is likely to grow over 8 per cent on the back of government's focus on infrastructure development and housing. Further, the enhanced capital allocation towrads infrastructure in the 12th Five-Year Plan will give the desirde push to the sector," it said.