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Dalmia Cement (Bharat) Ltd, a subsidiary of Dalmia Bharat Ltd, has added around 2.3 million tonne capacity to its Bengal Cement Works (BCW) unit in West Midnapore with an investment of ₹360 crore. With this, the overall capacity of the BCW unit would increase to 4 million tonnes per annum.
According to Ujjwal Batria, COO, Dalmia Cement (Bharat), post the Covid-induced slowdown, cement demand is expected to improve with affordable housing, mega real estate and infrastructure projects picking up.
“Cement demand typically picks up during the fourth quarter of a fiscal and continues into the first quarter. Through the first quarter of this year the demand was low as April was a washout due to the lockdown; we expect demand to pick up moving forward,” Batria told newspersons announcing the expansion of its Bengal unit on Thursday.
The company’s total capacity currently stands at 29 million tonnes (mt) following the expansion of its Bengal plant.
Dalmia Cement is also looking at another 2.3 mt brownfield expansion at its plant in Odisha to come onstream by the first quarter of FY22 thereby taking the total capacity to around 31 mt.
The company had recently completed the acquisition of Murli Industries. It expects another 3 mt capacity addition to come from this acquisition by the third quarter of the next fiscal, taking its total capacity to 34 mt.
Pan-India demand
There has been good demand coming in from the rural markets, particularly in the States of Bihar, Jharkhand, Bengal and Odisha, and going forward this is likely to sustain.
“Given Dalmia Cement’s pan-India presence, we are well-prepared to support the increasing rural and urban demand by providing cutting-edge logistics solutions to service the market. DCBL will continue to build green cement plants and help the state achieve global standards in sustainability,” he said.
However, the increasing costs of raw materials, primarily petcoke, and the low prices of cement is likely to exert pressure on margins.
“There are slight headwinds on margins due to costs and the lower prices, particularly in some markets,” he said.
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