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UltraTech Cement plans to set up five waste-heat-recovery plants with an investment of ₹500 crore.
The new plants, coming up at select manufacturing units, will have a cumulative capacity to generate 63 MW power and will take its overall capacity from the waste-heat recovery process to 121 MW. The company will be able to meet 50 per cent of its power requirement from these plants.
Atul Daga, Chief Financial Officer, told BusinessLine the company has been taking various measures to bring down overall costs by improving efficiency. The waste-heat recovery plants will bring down the power cost to 50 paise per unit from ₹4 when they go on stream in two years, he added. This will also protect the company from sudden swings in thermal coal prices.
The sharp increase in operational cost and stagnant cement prices have hit the company's bottomline in the June quarter. Though cement prices started increasing by June-end, excess supply capped the ability of companies to pass on the incremental cost.
Binod Kumar Modi, Senior Research Analyst, Reliance Securities, said though UltraTech Cement’s EBITDA per tonne at ₹826 appears to be the lowest in the last 14 quarters, there is visible recovery in realisations across regions. It has managed to rein-in soaring costs as operating expenses have broadly been under control led by higher utilisation and synergies from new units, he added.
UltraTech is in the process of acquiring 11.4 mtpa cement production capacity of BK Birla owned Century Textiles through a share swap deal at an enterprise value of ₹8,621 crore, including debt of ₹3,000 crore. This will add three integrated cement units situated in Madhya Pradesh, Chhattisgarh and Maharashtra and a grinding unit in West Bengal of 2 mtpa.
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