The Hindu Business Line : UltraTech lines up Rs 2,700-cr capex

, UltraTech Cement Ltd has lined up a capital expenditure programme of Rs 2,700 crore to augment its cement manufacturing capacities and installcaptive power plants within the next three years.

Addressing the sixth Annual General Meeting here on Monday, the Chairman, Mr Kumar Mangalam Birla, said the company has earmarked a capital expenditure programme of about Rs 1,424 crore, including Rs 844 crore for installation of captive power plants at its units in Gujarat and Chhattisgarh.

Further, to cater to the growing demand for cement and consolidate its market share in South India, the company will be additionally investing Rs 1,274 crore towards a four-million-tonne capacity expansion at its Tadipatri plant in Andhra Pradesh. "This is inclusive of setting up of a 1.3-mt Split Grinding Unit and a 46-MW captive thermal power plant," Mr Birla said.

Capex plan

The capex programme also includes de-bottlenecking of its plants at a cost of Rs 308 crore, which will add a capacity of 0.5 mt. Improving efficiencies, leveraging logistics benefits, higher use of alternative fuels and a thrust on value-added product mix, including blended cement, will translate into higher earnings, Mr Birla said.

The company has a present capacity of 17 mt per annum, with five integrated cement plants, supported by five grinding units and three thermals, including one in Sri Lanka.

Outlook

On the outlook for the cement industry, he said in the medium term, the demand and supply situation is expected to be in balance, with a couple of years before the next cycle of new capacity enters the market. "Incidentally, the Indian cement sector is the second largest in the world after China. Regardless, the per capita consumption of cement in India is just 125 kg, which is very low in comparison with the average world consumption of 267 kg, underlining the tremendous growth potential," he said.

Dividend

The company declared a dividend of Rs 1.75 per share, as against Rs 0.75 per share paid in the previous fiscal. The total outgo on account of dividend, inclusive of corporate tax, will be Rs 24.85 crore during the year.