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Birla Corporation, an MP Birla group outfit, plans to scale up its cement production capacity to 20 million tonnes per annum (mtpa from 15.5 mtpa, in the next three years.
According to Harsh V Lodha, Chairman, the company will use both greenfield and brownfield routes.
“We have a scope to expand within our cement business. Our capacity is 15.5 mtpa and we wish to take it up to 20 mtpa in the next two-to-three years. Some of it will be addition to our existing capacity and some could be in a new location,” he told newspersons on the sidelines of the company’s annual general meeting here on Friday.
The company achieved successful integration of operations of Reliance Cement Company (RCCPL), which it had acquired in August 2016.
In FY18, Birla Corp registered an increase of about 1.52 per cent in cement sales on standalone basis and nearly 23 per cent on a consolidated basis.
In absolute terms, the sale of cement on standalone basis increased to 79.48 lakh tonnes (lt) compared with 78.29 lt in the previous year. RCCPL sold 44.48 ltin 2017-18, according to the company’s annual report.
“The operations of RCCPL have stabilised and the planned synergies, expected out of the acquisition, are getting realised,” the annual report said.
Industry under pressure
The cement industry has witnessed significant pressure over the course of last year due to increase in various input costs including power, fuel costs on account of a sharp spike in pet coke and coal prices.
The operations were also impacted due to non-availability of railway rakes, he said.
However, moving forward, cement prices were expected to improve, buoyed by a pick-up in construction activity and easing sand availability.
“While costs have gone up, but contrary to the perception, cement prices haven’t increased to that extent.
Premiumisation
“But going forward, we hope with demand improving we will get fair price for cement to compensate for the rise in input costs,” he added.
The company is also planning to enhance its focus on the premium brands to shore up value sales.
Currently, more than 30 per cent of its sales come from the premium segment in volume terms and nearly 35 per cent in value terms.
Some of its present offerings in the premium segment include MP Birla Cement ‘Ultimate’ and ‘Perfect’.
The company has also launched ‘Ultimate Ultra’ and ‘Perfect Plus’ to further uptrade the premium portfolio.
Plans are afoot to increase volume share to 35 per cent and value share to 40 per cent.
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