M P Birla Group company Birla Corporation on Monday said it is planning to invest around Rs 2,400 crore for setting up a greenfield cement manufacturing plant in Maharashtra.
M P Birla Group company Birla Corporation on Monday said it is planning to invest around Rs 2,400 crore for setting up a greenfield cement manufacturing plant in Maharashtra. After operationalisation, the proposed plant at Maharashtra’s Mukutban, with a capacity of 4 million tonnes, will take the Kolkata-based company’s total cement production capacity from the present 15.5 million tonnes per annum (MTPA) to 19.5 MTPA. “We are looking to set up the clinkerization plant with a split grinding unit. The investment would be Rs 2,400 crore. First, it has to be approved by the board,” chairman Harsh V Lodha told reporters after the company’s annual general meeting here.
Lodha said the company would use a mix of debt and internal accruals to finance the capital expenditure for the new plant. The mining lease at Mukutban would enable it to set up the clinkerization unit, according to the latest annual report of the cement maker. On when the new cement unit is expected to come up, Lodha said, “We can come faster than most of the other plants because land has already been acquired.”
Stating that brand building exercise was always a continuous process, he said the company had already invested on the rebranding exercise of Perfect Cement, a brand which it acquired last year after buying 100% stake in Reliance Cement Company (RCCPL).The rebranding exercise of the Reliance Perfect Cement brand as MP Birla Perfect Cement had started during the fourth quarter last fiscal, the annual report said, adding the transition of brand was seamless.
In February last year, Birla Corporation signed a definitive Share Purchase Agreement with Anil Ambani-led Reliance Infrastructure for acquisition of its entire cement business for an enterprise value of R4,800 crore. This acquisition provided the M P Birla Group company with the ownership of high-quality assets, taking its total capacity to 15.5 MTPA from 10 MTPA, strengthening its presence in the high-growth Central region.The company launched the Perfect Cement brand in an entirely new avatar in the Central India market in February this year. “We are already serving the entire top half of the country,” Lodha said.
“In the next three to four years, you will see that in Central India (cement) demands are coming up because of various projects, infrastructure developments and new housing. But no new capacity is coming up,” he said, point out that his company would be in an advantageous position to seize this opportunity.Demand for cement in India, the second largest producer of the commodity in the world, is expected to reach 550-600 MTPA by 2025, and the housing sector is the biggest demand driver of cement, accounting for about 67% of the total consumption in the country.
Birla Corporation launched two new cement brands—Concrecem and Multicem — in March this year, keeping in view the rapid growth in infrastructure and projects in the country. On Monday, the company’s scrip rose 0.40% to end the day at Rs 945.60 on BSE.