UltraTech Cement, a company within the Aditya Birla Group, has announced its commitment of ₹32,400 crore for capital expenditure (capex) over the forthcoming three years as a component of its expansion strategy. The company aims to elevate its capacity to approximately 200 million tonnes per annum (MTPA) in the foreseeable future.
In a recent filing, UltraTech Cement unveiled the commissioning of two new greenfield projects, collectively adding a capacity of 5.4 MTPA. These projects, situated in Chhattisgarh and Tamil Nadu, will augment the company’s total capacity to 151.6 MTPA.
In the preceding 12 months, the cement manufacturer has already expanded its capacity by 18.7 MTPA. Furthermore, expansions amounting to 35.5 MTPA are presently underway across 16 different locations. UltraTech is also finalizing its acquisition of Kesoram Cement, a move that will further bolster its grey-cement capacity to 198.2 MTPA.
Kumar Mangalam Birla, chairman of the Aditya Birla Group, emphasized, “This milestone underscores our commitment to continually contribute to a robust and prosperous India, ensuring our growth aligns with the nation’s progress.”
Birla added, “With an extensive network comprising integrated cement plants, grinding units, bulk terminals across 59 locations in India, along with 307 ready-mix concrete plants, UltraTech’s scale and capacity footprint are unmatched. This expansive reach will further facilitate UltraTech in meeting the burgeoning demand for cement throughout the nation.”
According to a Crisil Ratings report, the cement industry is projected to augment its capacity by 150-160 MTPA from FY25 to FY28. Over the past five fiscal years, the industry has already boosted its capacity by 119 MTPA, reaching 595 million tonnes.
“The forthcoming fiscal year is expected to witness the commissioning of 70-75 million tonnes of added capacity, with a significant proportion (50-55%) concentrated in the eastern and central regions,” the Crisil report stated. Large players are anticipated to contribute to 50-55% of the planned capacity augmentation and incremental supply, with heightened competition likely limiting price growth to 0-1%.
Nevertheless, the rapid pace of capacity expansion is expected to hinder margin improvements to the extent seen in FY21, when lower energy prices bolstered profits despite the pandemic-induced demand challenges.
UltraTech asserts that it has experienced an eleven-fold growth over the past two decades, significantly outperforming the industry’s four-fold expansion. “Our consistent endeavor has been to foster sustainable growth by delivering superior value to all stakeholders. India’s robust growth trajectory offers ample opportunities for long-term expansion in the cement sector. As India’s premier cement and ready-mix concrete company, UltraTech stands ready to support the nation in its promising journey of growth ahead,” remarked KC Jhanwar, managing director of UltraTech Cement.
