The group plans to spend Rs 1,700 crore in the next two years on Grasim, which has diversified business interests like cement, viscose staple fibre (VSF) and chemicals. Out of the Rs 1,700 crore, Rs 951 crore will be earmarked for capacity expansion of the cement business by another 1.5 million tonne per annum (MTPA). The company produces a total 31 million tonne of cement per year.
The company's VSF business will get Rs 833 crore for capacity expansion and modernisation. Aditya Birla group officials could not be reached for comment.
The capex plan also includes Rs 987 crore to be spent on Ultratech for modernisation and other projects. "The capex plan, including modernisation, is a combination of expansion and cost-saving measures," said an analyst with a local brokerage.
The cement industry growth rate in India is pegged at 8% for next four years. "To fill the demand-supply gap in cement, this is a much-needed investment," added the analyst.
The company has 11 composite plants, seven grinding units, seven RMC units and four bulk terminals.