Aditya Cement to up capacity

Capacity to be raised from 1.5 million tonne per year to 3 million tonne per year.

Grasim Industries, the flagship of Aditya Birla group, will invest about Rs 560 crore to double the capacity of Aditya Cement from the current 1.5 million tonne per annum.

Industry sources say post-expansion, the facility based in Shambupura, Rajasthan, will be the third largest in the company.

Group officials, however, declined to comment.

The group is the market leader in the cement industry with an aggregate capacity of 38 million tonne per annum.

While Grasim has a 17 million tonne per annum capacity, UltraTech Cement also produces 17 million tonne of cement and Century Textiles has an annual capacity of 4.7 million tonne. Aditya Birla group chairman Kumar Mangalam Birla in February was appointed as additional director of Century Textiles.

The expansion at Aditya Cement will take Grasim's total capacity to a touching distance of 40 million tonne per annum. Other than cement, Grasim's businesses, with a turnover of Rs 6,247 crore in FY05, includes sponge iron, chemicals and textiles.

Ever since Holcim took over the reins of Gujarat Ambuja Cement and ACC earlier this year, the race for market leadership in the cement industry has heated up.

The Swiss company, at present, has a capacity of 35 million tonne per annum, which will be increased to 40 million tonne within three years.

Grasim's latest expansion makes the equations more endearing. Experts opine that the top two players, backed by strong financial resources, are expected to further consolidate their position through organic and inorganic means.

At the same time, the gap between the top two players and rest of the industry has further widened. None of the other players have capacities in excess of 10 million tonne.

In fact, the third-placed India Cements has a capacity of 8 million tonne per annum and Madras Cements 6 million tonne.