Birla Corporation is planning to raise its cement production capacity to 25 million tonne by FY26 from the present 20 million tonne. The company is planning to ramp up the capacity by raising utilisation at Mukutban plant in Maharashtra, setting up of second clinker unit at Maihar plant in Madhya Pradesh and constructing new grinding units.
“With the commissioning of Mukutban we have virtually ring-fenced our core market of Central India — which we can service seamlessly from our six plants, namely Maihar, Satna, Kundangunj, Raebareli, Chanderia and, now, Mukutban. The strategic location of these plants and standardisation of product quality allows us to interchange source of supplies to maximise realisation and serviceability for our customers,” chairman Harsh V Lodha told shareholders during the company’s 103rd annual general meeting on Tuesday.
With the ramping up of the production at its Mukutban unit, the company is confident of raising its market share in the premium segment in the state, where major players are active.
Mukutban plant has an installed cement production capacity of 3.9 MT annually. Currently, capacity utilisation stands at 40-45%. The company has plans to increase the capacity utilisation to nearly 3 MT by FY25.
The cement maker is also eyeing to raise its Ebitda to Rs 850 per tonne by this fiscal end, from Rs 664 at the end of the first quarter. The increase in Ebitda would be mainly from cost reduction and kicking in of incentive from the Maharashtra government for the capital expenditure at Mukutban plant.
“Going forward, after commissioning of Mukutban, we need to consolidate. We would like the exit the (current) year with a run rate of 2 lakh tonne per month at Mukutban. We are hopeful to take our Ebitda to Rs 850 per tonne at the end of this fiscal. By the end of the current financial year, we will be ready for the next wave of expansion. We need to set up some critical grinding facilities,” managing director and CEO Sandip Ghose told reporters at a media conference post AGM. “We are expecting some price rise to happen in the next two quarters along with the increase in demands,” Ghose added.