UltraTech Cement plans Rs 2,000-crore capex in Rajasthan

UltraTech Cement, an Aditya Birla Group company, envisages a capital outlay of Rs 2,000 crore for its expansion plans in Rajasthan.

UltraTech plans to expand its capacity at Aditya Cement works in Rajasthan by 2.90 million tonnes per annum (MTPA) including setting up of two grinding units.

The expansion envisages a capital outlay of Rs 2,000 crore. The additional capacity is expected to be commissioned by March 2015, a company statement said.

The company is implementing projects across many of its locations. It has commissioned projects of clinkerisation plant at Rawan, Chhattisgarh with a capacity of 3.30 MTPA and grinding unit at Hotgi, Maharashtra having a capacity of 1.55 MTPA.

The company has also increased its cement grinding capacity at Gujarat plant to 0.60 MTPA, bulk terminal at Cochin, Kerala and Wall care putty plant at Katni, Madhya Pradesh, the release said.

With the commissioning of these projects, the company's clinker capacity has increased to 41.80 MTPA and that of cement to 53.90 MTPA. The clinkerisation plant of 3.30 MTPA in Karnataka is expected to go on stream in first quarter of FY14.

With the commissioning of the existing projects under implementation and Aditya Birla Group's expansion, UltraTech's cement capacity will stand augmented to 64.45 MTPA, the company said.

UltraTech posted a combined cement and clinker sales at 12.05 million tonnes in fourth quarter of FY13. Net revenue stood at Rs 5,819 crore as against Rs 5,650 crore, up by 3 per cent. Profit after tax was Rs 753 crore (after providing for the additional deferred tax liability of Rs 87 crore) as compared to Rs 872 crore in fourth quarter of FY12.

The quarter witnessed continuing pressure on input and logistics costs, given the increase in railway freight and hike in diesel prices though there was some relief on account of the softening in prices of imported coal, the company said.

Commenting on the outlook, the company said the demand of cement is expected to grow by an average 8 per cent in the long term with housing, infrastructure and allied spending being the key value drivers.

Industry capacity utilisation is likely to improve to 80 per cent in FY16 as the pace of capacity addition will slow down. Cost pressures are easing off with the decline in global commodity prices, particularly energy, the release stated.