Birla Corp plans to ramp up cement production to 25 mt by 2025-26 fiscal

MP Birla Group flagship company Birla Corporation has drawn up a strategy to augment its cement production capacity to 25 million tonnes by the 2025-26 fiscal from the existing 20 million tonnes, officials said on Tuesday.

The cement maker is planning to meet its targeted production by increasing capacity utilisation at its Mukutban plant in Maharashtra, setting up the second clinker unit at Maihar in Madhya Pradesh and constructing new grinding units.

"With the commissioning of Mukutban plant, we have virtually ring-fenced our core market of central India which we can service seamlessly from our six plants, namely Maihar, Satna, Kundangunj, Raebareli, Chanderia, and now, Mukutban.

The strategic location of these plants and standardisation of product quality allow us to interchange source of supplies to maximise realisation and serviceability for our customers," Birla Corporation Chairman Harsh V Lodha told shareholders during the 103rd annual general meeting of the company here.

With the increasing capacity utilisation of the Mukutban unit, the company is confident of increasing its market share in the premium cement segment in that state, where other major players are active.

The integrated Mukutban plant has an installed capacity of 3.9 million tonnes annually.

The capacity utilisation at present stands at 40-45 per cent, and the company aims at a capacity utilisation of nearly 3 million tonnes by the 2024-25 fiscal, Birla Corporation MD and CEO Sandip Ghose said.

The cement maker is also expecting its Ebitda to increase to Rs 850 per tonne by this fiscal end from Rs 664 at the end of the first quarter, he said.

"Despite the constraints, we were able to cross the run rate of 1 lakh tonnes per month by January 2023 and turned Ebitda positive in March 2023," Lodha said.

The rise in Ebitda would be mainly from cost reduction and start of the incentive from the Maharashtra government for capital expenditure at Mukutban plant.

"Going forward, after commissioning of Mukutban, we need to consolidate. We would like to exit the (current) year with 2 lakh tonnes per month at Mukutban. By the end of the current financial year, we will be ready for the next wave of expansion," Ghose told reporters at a press conference after the AGM.

The Kolkata-headquartered company is also expecting some price rise in the next two quarters along with increase in demand, Ghose added.