Aditya Birla Group company UltraTech Cement has announced plans to invest Rs12,886 crore to expand annual production capacity by 22.6 million tonnes (MTPA).
The capital cost of capacity expansion works out to $76 per tonne of cement, according to reports.
The board of directors of Ultratech Cement, at its meeting last week, approved capex of Rs12,886 crore capacity expansion plan involving a mix of brown field and green field expansion. This would be achieved by setting-up integrated and grinding units as well as bulk terminals. The additional capacity will be created across the country, the company has stated.
"This ambitious capacity expansion plan is a significant milestone in the ongoing transformational growth journey of UltraTech. The company has more than doubled its capacity over the last five years and is committed to meeting India's future needs for housing, roads, and other infrastructure. This investment is backed by a strong conviction on India's growth potential as well as a deep and nuanced understanding of the market dynamics of the cement industry. Given the size of the investment outlay, I am confident that this new capacity creation will have a multiplier effect leading to jobs and growth across multiple regions in India," Kumar Mangalam Birla, chairman, Aditya Birla Group, said.
Commercial production from these new capacities is expected to start in a phased manner, by FY25. UltraTech's current expansion programme is on track and estimated to be completed by the end of FY23.
Upon completion of the latest round of expansion, the company's capacity will grow to 159.25mtpa, reinforcing its position as the third largest cement company in the world, outside of China, with a consolidated grey cement capacity of 119.95 MTPA.