UltraTech Cement, part of the Aditya Birla Group, has estimated a capital expenditure of about Rs 2,500 crore .
UltraTech Cement, part of the Aditya Birla Group, has estimated a capital expenditure of about Rs 2,500 crore for the financial year 2018-2019. This is for capacity expansion projects, waste heat recovery systems, regulatory requirements, plant infrastructure and routine maintenance, the company said in its annual report.
During the year ended March 31, 2018, the company said it spent over Rs 1,900 crore on various capital expenditure during the year. These include a greenfield project at Manawar in Madhya Pradesh’s Dhar; Bara grinding unit in Uttar Pradesh; waste heat recovery system in Chhattisgarh and capex related to modernisation. Meanwhile, the net capital expenditure for FY18 increased by a sharp 49% to Rs 1,836 crore.
Specifically, the company commissioned a greenfield clinker capacity of 2.5 MTPA in Madhya Pradesh, a cement-grinding facility of 1.75-MTPA capacity and an auto-loading facility. Another cement-grinding facility of 1.75-MTPA capacity, as well as a WHRS of 13-MW capacity, is under erection and both are expected to be completed before September 2018, the annual report stated.
During the year, the company’s board of directors also approved the setting up of a 3.5-MTPA integrated cement plant at Pali, Rajasthan, at an investment of around Rs 1,850 crore. Commercial production from the plant is expected to commence by June 2020.
In the letter to shareholders, UltraTech Cement chairman Kumar Mangalam Birla said the growth in the cement sector is expected to be around 8% in financial year 2018-2019, which is encouraging compared with growth over the last few years. “The government’s unrelenting thrust on bringing the nation’s infrastructure up to speed coupled with inclusive growth, is the major push factor for the economy. The outlook on the sector is bright,” he said.
UltraTech Cement’s standalone net profit for the year ended March 31, 2018 declined by 15% to Rs 2,231 crore against a year ago. The net revenue increased by 25% to Rs 29,790 crore during the year. The company’s Ebitda for the year increased by 15% to Rs 6,478 crore, while the margins were down to 22% versus 24% a year ago due to continued cost pressures.
UltraTech Cement chief financial officer Atul Daga had told FE recently that the company is bullish on the growth prospects for the cement industry, as the government goes big on roads and metro spends. Even as the infrastructure sector is looking up, the housing sector, which is the biggest demand driver for cement, has still not started growing. However, Daga had said that infrastructure spending will be a trigger for housing spends, which should start from the next financial year.