UltraTech to cross 200 mn tonne per annum capacity by FY27: K M Birla

Leading cement maker UltraTech is expected to cross 200 million tonne per annum capacity by FY27 helped by recent acquisitions and expansion projects, Chairman Kumar Mangalam Birla said on Wednesday.

The Aditya Birla Group flagship firm has embarked on a capacity expansion drive "on a scale that is globally unprecedented" in the cement sector, he said while addressing the shareholders in the annual general meeting of the company.

UltraTech last month announced acquisition of Tamil Nadu-based India Cements Ltd (ICL). Its Rs 3,142 crore open offer for acquiring 26 per cent stake will tentatively open on September 19.

It has already announced the acquisition of a 32.72 per cent stake in ICL from promoters and their associates for Rs 3,954 crore.

 

Besides, UltraTech is acquiring Kesoram Cement Business from Kesoram Industries, for which it received approval from fair trade regulator CCI in March.

UltraTech is also increasing the capacity of its existing units as it faces competition from billionaire Gautam Adani-led Ambuja Cements, which is also pacing up capacity with acquisition and brownfield expansions.

"With the completion of the ongoing expansion projects across India by FY27, and receipt of statutory approvals for the recently announced acquisitions of Kesoram Cement (10.75 MTPA) and The India Cements (14.45 MTPA), our total cement capacity will surpass the 200 MTPA target that was announced at last year's AGM," said Birla.

This expansion will align with the group's long-standing vision of being the leading global player in the cement sector," he added.

"Our ambitious capacity expansion builds on the significant long-term growth opportunity for the cement sector in India," he said adding India's infrastructure sector is poised for remarkable growth, with an estimated 15.3 per cent compound annual growth rate (CAGR) in investments, projected over the next five years.

The $ 8.4 billion (Rs 69,810 crore) company has increased its cement production capacity by 13.3 MTPA through expansion projects and in April this year, it crossed 150 MTPA production capacity.

"This capacity surpasses 150 per cent of the capacity in the United States and constitutes 80 per cent of Europe's capacity," he added.

Now, UltraTech operates 24 integrated manufacturing units, 33 grinding units, one Clinkerisation unit and 8 Bulk Packaging Terminals across 60 locations in India and its "scale and capacity footprint is unparalleled," he added.

"We are leveraging this expanded manufacturing footprint to reduce our operational costs, particularly logistics costs and improve customer service by reducing lead time and leveraging our strong nationwide distribution network," said Birla.

This scale will also further enable UltraTech to service India's growing demand for cement across the country.

Adani Group, which jumped in the cement sector in September 2022, after acquiring Ambuja Cements from Swiss firm Holcim for cash proceeds of $ 6.4 billion (about Rs 51,000 crore) is also pacing up.