Ultratech to invest Rs1500 crore in capex in FY21: Kumar Mangalam Birla
Ultratech Cement Ltd, India’s largest cement company, plans to invest Rs 1,500 crore (US$ 212.80 million) in capital expenditure this fiscal despite the constraints of an ongoing pandemic, Mr Kumar Mangalam Birla, Chairman, said at the annual shareholder meeting. Ultratech’s global capacity is stands at 114.8 million tonnes per annum and is the is the only company to have a capacity of over 100 million tonnes in a single country, outside of China.
“The company has planned total capex cash outlay of Rs 1,500 crore (US$ 218.80 million) for a range of key initiatives," Mr Birla said. “These include installation of 66 MW of waste heat recovery systems (WHRS), 1.2 million tonnes per annum brownfield cement capacity addition in West Bengal and Bihar, pending work for phase 2 of the Bara grinding unit in Uttar Pradesh, coal block development in Madhya Pradesh, new Ready Mix Concrete plants and other plant upkeep capex. With these expansion plans, your company’s consolidated cement capacity will stand augmented to 118 million tons per annum and green power capacity will increase to 185 MW for Waste Heat Recovery Systems and over 350 MW for solar and wind power."
In the fiscal year 2019-20, Ultratech recorded net revenues of US$ 5.94 billion and operating profit of US$ 1.40 billion.
There was decline in the cement industry in FY20, after witnessing a healthy demand growth of around 13 per cent in FY19, Mr Birla said. “Cement demand was sluggish during H1FY20 exacerbated by the general economic slowdown. The second half of the fiscal witnessed extended monsoons, low capital expenditure on infrastructure and road activities, along with financial stress in the NBFC and housing sectors. The improving demand situation since December 2019 could not be sustained, with the outbreak of COVID-19."
Although, Indian economy is expected to contract during FY21, Mr Birla said he was confident that the economy will revert to the 6 to 8 per cent growth trajectory in the next fiscal.
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