 "UltraTech Cement to invest Rs 32,400 crore in the next three years")
(This report has been updated)
India’s largest cement manufacturer, UltraTech Cement, announced on Tuesday that it will invest Rs 32,400 crore in the next three years as part of its ongoing expansion plans.
UltraTech had previously stated plans to increase its cement manufacturing capacity to close to the 200 million tonne per annum (mtpa) mark. On Tuesday, the company further elaborated on the investment figure needed to achieve this stated target.
The country’s rising expenditure on infrastructure projects and steady growth in demand for housing, aided by various government schemes, have led to a robust increase in cement sales.
Demand is projected to maintain its approximately 8 per cent growth rate in the current financial year. This buoyant demand has prompted cement companies to plan capacity expansions to maintain and gain market share.
As part of its ongoing expansion plan, UltraTech also commissioned two new greenfield capacities totaling 5.4 mtpa in the states of Chhattisgarh and Tamil Nadu. With this, UltraTech’s total capacity now stands at 151.6 mtpa.
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“Reaching this milestone is symbolic of India’s ascent on the global stage and demonstrates the dynamism and scale of Indian corporations,” said K M Birla, chairman of Aditya Birla Group, in the statement. He added, "And this scale will further enable UltraTech to service India’s growing demand for cement across the country.”
UltraTech will add another 35.5 mtpa to the present 151 mtpa capacity through ongoing expansion at 16 locations. Furthermore, UltraTech is also in the process of finalising the previously announced acquisition of Kesoram Cement, with a total capacity of 10.75 mtpa.
The expansion and the acquisition, combined, are expected to result in UltraTech investing close to Rs 32,400 crore in the next three years. Once completed, these investments are likely to increase the company’s overall capacity to 198.2 mtpa.
Aditya Birla Group company is already a market leader; the new investments are expected to maintain the company's leading position, despite capacity additions planned by other competitors.
For instance, Ambuja Cement (including ACC capacity) is the second-largest cement producer, with a capacity of 77.4 mtpa. Adani-promoted Ambuja Cement plans to double its capacity to 140 mtpa by 2028.
Similarly, in a separate announcement, Shree Cement, another of the top four cement producers in the country, said that it has inaugurated an integrated unit in Andhra Pradesh, six months ahead of schedule. With a production capacity of 3 mtpa, the new plant will increase Shree Cement’s manufacturing capacity to 56.4 mtpa.
Shree Cement plans to expand its capacity to 80 mtpa by 2028, with 13 more plants expected to be operational by then, five of which are scheduled to be commissioned in 2024–25, the company said.