Cement output: Birla Corp eyes 30 million tonnes capacity by 2027

By: |
September 30, 2021 6:45 AM

After the commissioning of the Mukutban plant, the company will embark upon the “next phase of growth”, Lodha said, adding plans were afoot to achieve the production capacity target of 30 mt by 2027 without compromising on financial prudence.

According to him, even as the company seeks to grow aggressively and faster than the industry average in the past few years, it will as a policy “remain conservative” on borrowings.According to him, even as the company seeks to grow aggressively and faster than the industry average in the past few years, it will as a policy “remain conservative” on borrowings.

Birla Corporation, the MP Birla Group flagship, is planning to expand its cement production capacity to 30 million tonnes (mt) by 2027, from its current production capacity of 15.6 mt. The capacity is expected to go up to around 20 mt by this fiscal-end after the commissioning of a 3.9-mt greenfield plant in Maharashtra.

Addressing shareholders in the annual general meeting of the company on Wednesday, chairman Harsh V Lodha said, “Our new plant at Mukutban near Nagpur should come onstream soon. Its construction was repeatedly disrupted since last year by the plight of migrant labour. This, coupled with an increase in commodity prices and Covid-related costs, have led to a cost escalation from Rs 2,450 crore to Rs 2,744 crore. But we are now confident that the 3.9-million tonne plant will be commissioned in the fourth quarter of the current year.”

After the commissioning of the Mukutban plant, the company will embark upon the “next phase of growth”, Lodha said, adding plans were afoot to achieve the production capacity target of 30 mt by 2027 without compromising on financial prudence.

According to him, even as the company seeks to grow aggressively and faster than the industry average in the past few years, it will as a policy “remain conservative” on borrowings.

Birla Corporation expects demands for cement to grow in “double digits” during the current financial year. “The monsoon this year has been good, and this should translate into a healthy kharif harvest. This augurs well for the rural demand,” the chairman said, adding there was an expectation on high momentum of infrastructure spending by the government.

Despite the possibility of high commodity prices exerting some pressure on cement makers, the company said it should be able to raise prices and sustain “healthy margins” if the demands remain strong.

Replying to the shareholders’ queries, Lodha said the Mukutban plant was coming in the region, where there had not been too much of integrated capacity expansion in the last few years. “It is an area where cement demand should grow well because that area is developing, and the Delhi-Mumbai corridor is also quite close to that plant. So, there should be a lot of infrastructure development around there,” he added.

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