UltraTech plans capacity spread

UltraTech CemCo, an Aditya Birla group company, has announced a capacity addition of 2.5 million tonne in the next two years, which will take its capacity to 20 million tonne per annum.

Kumar Mangalam Birla, chairman, UltraTech, said at the company's annual general meeting, "Further capacity addition of 2.5 million tonne will come through debottlenecking of the existing capacities in the next one or two years."

Birla further said that a capital expenditure of Rs 200 crore would be made over the next two years to remove the fundamental inefficiencies of the company's assets. However, he did not state the expenditure for the capacity increase.

UltraTech is also looking at refinancing Rs 550 crore of its high cost debt in the current financial year to bring down its average cost of borrowing to 6.7 per cent from the current 7.7 per cent.

A senior company official said, "Around Rs 700 crore of debt is due for repayment this year, out of which we have already rolled over Rs 330 crore in the first half.

Majority of the balance funds have been tied up at an average cost of around 6-7 per cent." In addition to this, the company will also repay Rs 150 crore owed to Larsen & Toubro, from internal accruals, he added.

The company's outstanding debt burden of Rs 1545 crore, will see a net decline of around 100 crore. However, the company is targeting a debt equity ratio of 1:1 in the next two years, down from the current 1.44:1.

New cement brand launch: Meanwhile, UltraTech CemCo, the demerged cement business of Larsen & Toubro, now controlled by the Aditya Birla group, will introduce its new cement brand UltraTech Cement from October 14, 2004.

Kumar Mangalam Birla, chairman, UltraTech said, "We will introduce the UltraTech brand on the 14th of this month. The new brand name will be launched in a phased manner and will replace the L&T Cement brand completely by the end of this year." UltraTech can use the L&T cement brand only till March 2005.