Ultratech to spend Rs 11,000 cr on expansion

Ultratech to spend Rs 11,000 cr on expansion

Ultratech Cement of Aditya Birla Group plans capital expenditure of Rs 11,000 crore over the next three years for new plants in India. These include setting up of additional clinkerisation plants at Chhattisgarh and Karnataka, together with grinding units, bulk packaging terminals and ready-mix concrete plants across the country. Orders have been placed for major equipment for setting up the projects. The company expects the projects to be operational from early 2013-14 (April-March) and its capacity will go up by 9.2 million tonne per annum. Ultratech currently has a production capacity of
52 million tonne per annum, and has 11 integrated plants, 15 grinding units and five terminals. It expects the cement industry to grow at 8.5 per cent going ahead, aided by government initiatives in rural development, infrastructure and housing. The cement sector demand grew at 5.3 per cent in 2010-11 (April-March). However, according to the company, the growth was lowest in 10 years, mainly due to subdued growth in various key cement consuming states on the back of lower infrastructure spending, slowdown in real estate sector, extended monsoon and non-availability of railway wagons. Ultratech said there is surplus capacity in the market as 28 million tonne of capacity was added in the industry in the last fiscal year, over and above the 60-million tonne capacity addition in 2009-10. It expects the surplus scenario to last for the next three years. The company said the pricing environment is likely to remain challenging and that with the surplus capacity would keep margins under pressure.

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