Birla Corp plans to raise cement production capacity
Birla Corporation Ltd plans to invest around Rs 5,000 crore over the next four years to augment its cement and power capacities. Of this, close to about Rs 1,025 core is being invested in the current financial year to take its cement capacity from the present 7.5 million tonne to 9.3 million tonne by March. Most of the near-term investments would come from internal accruals and long term debt. "Till now we have been funding from internal accruals and some long term loans. Apart from this Rs 1025 crore, there would be new investments in the upward of Rs 3,500-4,000 crore in the next three to four years," said
Harsh V Lodha, chairman, Birla Corporation Ltd
after the annual general meeting of the company. Birla Corp has a surplus cash holding of about Rs 1,500 crore. Lodha also said the 1.2 million tonne brownfield project for raising capacity at Chanderia and the 0.6 million tonne capacity addition at Durgapur are likely to be commissioned by November-December 2011. The expansion projects relating to replacement of old cement ball mills, one at Satna and the other at Chanderia, for increasing the cement grinding capacity and ensuring power saving are also progressing satisfactorily. "With a view to optimise on the logistic costs, it is proposed to install a grinding-cum-packing plant with a capacity of 7.5 lakh tonne per annum at Kota, Rajasthan. At Raebareli Cement Works the cement capacity is being expanded from 6.3 lakh tonne per annum to 8 lakh tonne," he said. The company also plans to increase the capacity at Chanderia by another 1.5 million tonne, which will take the total cement capacity to 10.8 million tonne," Lodha added. Talking about the outlook of cement sector, he said the sector has witnessed massive capacity additions of over 100 million tonne during the past three years, which has resulted in significant pressure on price realisation and also on capacity utilisation during 2010. During last fiscal, the demand in the market grew at a meagre 5 per cent. We are hoping that it will grow at 8-10 per cent this year," Lodha concluded.