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UltraTech Cement plans capital expenditure of Rs 3,798 crore this fiscal to add 2.9 million tonnes with supporting grinding units and waste heat recovery in its subsidiary Aditya Cement Works in Rajasthan. Besides, the company will also invest to modernise facility at its jetty in Gujarat.
Addressing shareholders on Wednesday, Kumar Mangalam Birla, Chairman, UltraTech Cement said it intends to invest Rs 3,053 crore next fiscal and another Rs 205 crore in the financial year 2016-17.
The company expects its turnover to touch Rs 25,000 crore this fiscal against Rs 20,078 crore recorded last financial year.
By early next year, he said, the installed capacity would increase to 70 million tonnes from the current 62 million tonnes.
UltraTech expects its cement exports to remain at the last year level of 7.44 million tonnes. It ranks fifth in the global ranking, excluding China.
The company expects the supply to exceed demand for the next few years with additional capacity being set up by the industry going on stream.
Kumar said the cement industry had to bear the brunt of the overall economic environment while demand stayed sluggish.
Alongside, he said, excess capacity additions compared to the incremental demand situation continued to impair the sector's advancement. The capacity utilisation of the company was at 79 per cent last year with market share of 17 per cent.
"The demand supply mismatch, I believe, is expected to stay for some more time. It will lead to prices remaining under constant pressure," he said.
Additionally, he added, the year witnessed an ongoing surge in logistics and raw material costs. The increase in railway freight and diesel prices stoked up the cost further, he said.
The cement industry growth is closely linked to the GDP growth which expected to grow at 6-7 per cent this fiscal. If it comes true then the cement industry will grow 1.2 times over GDP, he said.
The government and the Reserve Bank of India initiated a slew of measures, to contain fiscal and current account deficit, basically to stabilize the rupee and bolster investor confidence. The new Government has rolled out many initiatives, to address fiscal imbalances and escalate investment activity. These are positives that should result the Indian economy shifting to a higher growth trajectory, he said.
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