HIL Ltd, formerly Hyderabad Industries Ltd, has commissioned its new plant in Timmapur, near here.

“We have invested ₹25 crore in setting up of this plant, with 1 lakh cubic metre production capacity,” Managing Director Prashant Vatkar told BusinessLine in an interaction here.

With this, the total production capacity of AAC blocks will increase from the present 6 lakh cubic metres to 7 lakh cubic metres. “By the middle of next year, we will touch 8 lakh cubic metre capacity,” he said.

In January this year, HIL had commissioned the AAC Blocks manufacturing facility in Jhajjar, Haryana with an installed capacity of 1.5 lakh cubic metre per annum.

Business segments The CK Birla Group company primarily operates in the three segments – building, thermal insulation products and wind power – with a lion’s share coming from building products division.

It produces green building material, roofing solutions, panels, walling blocks, plywood substitutes, high-quality pipes and fittings, and industrial insulation.

While roofing business is growing in single digit, the AAC blocks and plywood substitutes business is witnessing double-digit growth, Vatkar said. The company sells cement sheets and blocks under Charminar and Aerocon brands, respectively.

He sees huge potential for growth in the blocks business due to aspirational issues and increasing ecological concerns over quality of red bricks. “Construction is also getting lighter day by day. In Europe, the entire industry has converted to lighter blocks but in India, it is in a nascent stage.”

The capex target for the ₹1,108-crore company (2014-15) for the current financial year is ₹70 crore. It is investing in expanding the capacity of AAC blocks,” Vatkar added.

Diversification While not reducing focus on the mainstay asbestos roofing business, HIL plans to examine possibilities of further diversification. “We are identifying what else we could do in the segment of building materials,” Vatkar said. In the next three years, the objective is to achieve a business mix of 60 per cent core asbestos roofing material, and 40 per cent of eco-friendly products. At present the ratio is 75:25.

Challenges There is a substantial growth spurt in Aerocon blocks, PVC (Polymer) pipes etc, he said.

On the business front, economic slowdown and tardy growth of industry remain big challenges. “We are not pushing the top line at the cost of the bottom line. We expect to end the year with ₹1,200 crore turnover,’’ he added.