UltraTech Cement On Capacity Expansion Spree

UltraTech Cement Ltd. will invest Rs 5,477 crore for its proposed capacity expansion plan.

The cement maker’s board has approved raising capacity by 12.8 million tonnes per annum via a mix of brownfield and green field expansion, the company said in a media statement. That would take its total installed capacity to 130.9 MTPA from 111.4 MTPA as of March 2020, making UltraTech, according to its latest annual report, the only company outside China to have 100-MTPA capacity in a single country.

The company, according to its presentation, claims to be the world’s third-largest cement maker by capacity outside China.

The additional capacity, according to the company, would be created in the fast-growing markets of the east, central and north. The commercial production from the new capacities is expected to go on-stream in a phased manner by the fourth quarter of FY23.

The expansion includes existing approval for the company’s cement plant at Pali, Rajasthan, and its 6.7-MTPA capacity addition currently underway in Uttar Pradesh, Odisha, Bihar and West Bengal, which is expected to be commissioned by FY22 in a phased manner, UltraTech said. With this, the total expansion would stand at 19.5 MTPA—the proposed 12.8 MTPA and the ongoing 6.7 MTPA.

At home, UltraTech’s capacity rose at an annualised growth rate of 13.6% between 2001 and 2020 compared with the industry’s 7.7% growth.

Deleveraging Plan

UltraTech’s capacity addition would not impact its ongoing deleveraging programme, which is on track and is expected to make the company debt free by March 2023, according to its media statement.

The company’s consolidated debt stood at Rs 12,132 crore for the quarter ended September 2020. Its net debt fell by nearly Rs 2,500 crore over the preceding three months during the period.