The company successfully commissioned 12.4 MTPA capacity of grey cement in FY23, and has further commissioned 5.5 MTPA brownfield capacity so far in this financial year.
UltraTech Cement Limited, India’s largest cement manufacturing company, has set a target to achieve 200 million tonne per annum (MTPA) production capacity, chairman Kumar Mangalam Birla said last Friday (11 August).
As of 2 August 2023, the company’s grey cement production capacity in the country had risen to 132.45 MTPA, almost doubling from 66.3 MTPA recorded in FY16.
The ambitious target comes amidst sectoral consolidation which has increased the intra-industry competition.
“This scorching pace of expansion is unprecedented in the sector. Completion of all the capacity expansion projects currently underway will take your company’s cement production capacity to 160-plus MTPA. The company is now targeting an ambitious goal of achieving a production capacity of 200 MTPA,” Birla said at UltraTech Cement’s 23rd annual general meeting.
The company successfully commissioned 12.4 MTPA capacity of grey cement in FY23, and has further commissioned 5.5 MTPA brownfield capacity so far in this financial year (FY24), raising the total capacity to 137.85 MTPA.
These include 2.2 MTPA at Patliputra in April, 2023; 0.8 MTPA at Neem ka Thana, Rajasthan in May, 2023; 1.3 MTPA at Sonar Bangla, West Bengal in July 2023 and 1.2 MTPA at Magdalla, Gujarat in August 2023.
Further, work on its next phase of growth of 22.6 MTPA is in full swing and commercial production from these new capacities is expected to go on-stream in a phased manner by FY25 and FY26.
The flagship cement company of Aditya Birla Group has charted an aggressive expansion plan as it believes that demand for cement across all sectors will continue to remain strong which is highly favorable for its performance.
Higher infrastructure spending ahead of the general elections in 2024 is expected to further propel cement demand during this fiscal, said a company statement.
One-On-One With Adani
The latest announcement comes close on the heels of Ambuja Cements Ltd (ACL), the cement and building material company of Adani Cement and part of the diversified Adani Group, acquiring Sanghi Industries Ltd (SIL) in first week of August.
The group had last year acquired Swiss giant Holcim’s cement businesses in India — Ambuja Cements and ACC Ltd — for $10.5 billion (around Rs 85,000 crore).
This was the conglomerate’s largest-ever acquisition, and as per the company, at the time, it was India’s largest ever ‘merger and acquisition’ transaction in the infrastructure and material space.
The deal made Adani the second largest cement player in the Indian market, after UltraTech Cement.
The acquisition of SIL will help ACL to strengthen its market leadership and increase its cement capacity to 73.6 MTPA from the current 67.5 MTPA and will help it achieve target of 140 million tonnes of cement manufacturing capacity by 2028 ahead of time.
Birla’s announcement is going to start a new round of competition in India’s vast and expanding market for cement.
While UltraTech’s market share of more than 20 per cent gives it an edge over Adani’s, it isn’t, however, an assured lead. The game is on.