UltraTech to expand capacity to 71.2 million tonnes by March 2016: KM Birla

Aditya Birla Group flagship UltraTech Cement is poised to take its capacity to 71.2 million tonne per annum (MTPA) by March 31 next year on the back of ongoing projects as well as recent acquisitions, Cchairman Kumar Mangalam Birla said on Friday.

The company also augmented its captive power capacity with the commissioning of 50 MW of thermal power plants and 22.5 MW through waste heat recovery.

"Despite the cement industry being snowed under the slowdown in the rural economy, lack of investment from both private and public sector coupled with the overall sluggish demand, UltraTech had put in a commendable performance...With the on-going projects underway, the capacity in India will grow to 71.2 MTPA by the end of FY 2015-16," Birla said addressing shareholders at the company's AGM on Friday.

He said UltraTech's directors have approved the acquisition of the cement units of Jaiprakash Associates Limited, situated at Bela and Sidhi in Madhya Pradesh.

Shareholders of the company have approved the scheme of arrangement between the company and Jaiprakash Associates Limited (JAL) and their shareholders and creditors for acquisition of the cement units, having a capacity of 4.9 mtpa together with a thermal power generation capacity of 180 MW TPP.

The Competition Commission of India has already approved the transaction. The transaction is now subject to approval from the high courts and getting all regulatory approvals.

"With this an additional 4.9 MTPA capacity and thermal power generation capacity of 180 MW will be added. This acquisition will raise UltraTech's cement capacity in India from 60.2 MTPA to 65.1 MTPA," he said.

Acquisition of the Gujarat units of Jaypee Cement Corporation Limited has been completed and the acquired facilities comprise an integrated unit at Sewagram and a grinding unit at Wanakbori, with a combined capacity of 4.8 MTPA.

"The enterprise value was Rs3,800 crore besides the actual net working capital at closing", he added.

Besides, reports said, the company is eyeing Jaiprakash Associate's 2.2 MT Bhilai unit as well.

The company augmented its captive power capacity with the commissioning of 50 MW of thermal power plants and 22.5 MW through waste heat recovery.

This brings its total thermal power capacity to 717 MW and waste heat recovery at 33 MW, Birla said, adding, "It meets around 80 per cent of UltraTech's total power requirement." Going forward, with the government's thrust on infrastructure development, housing sector, smart cities and roads among others, the company is well positioned to meet the expected rise in demand and participate in the next phase of growth in the country, he said.

"UltraTech has a strong balance sheet, robust cash flows and gearing levels well within reasonable limits. The company enjoys the confidence of its stakeholders. It has a market cap of over $13 billion. All of these help stoke the company s future growth and development," he said.

Ultratech reported net sales of Rs6,038 crore for the quarter ended 30 June 2015 compared to Rs5,649 crore in the corresponding period of the previous year.

Profit before interest, depreciation and tax stood at Rs1,252 crore and profit after tax at Rs591 crore against Rs1,264 crore and Rs626 crore, respectively, in the corresponding period of the previous year.