Ultratech to invest Rs 13,000 crore in capacity expansion

NEW DELHI: After Adani Group’s $10.5 billion foray in the cement sector, Aditya Birla Group company Ultratech is investing Rs 12,886 crore for a 22.6 MTPA (Metric tonnes per annum) capacity increase at a cost of $76 per tonne of cement.

Commercial production in these new capacities will begin by the end of FY2025, said Ultratech in a statement.  This would be achieved by setting up integrated and grinding units as well as bulk terminals across the country.

Since the entry of Gautam Adani, Asia’s richest billionaire, in the cement sector, analysts have cited that existing biggies such as Ultratech and JSW Cement will work towards increasing their expansion and reach to counter the new entrant, which in one deal has become country’s second-largest cement producer, only behind Ultratech. Swiss company Holcim has signed a binding agreement with Adani Group to sell its business in India in a nearly $10.5 billion deal. Holcim is the majority stakeholder in ACC and Ambuja Cement, which have a combined capacity of around 70 MTPA.

UltraTech’s current expansion program is on track and estimated to be completed by the end of FY23. Upon completion of the latest round of expansion, the company’s capacity will grow to 159.25 mtpa, reinforcing its position as the third largest cement company in the world, outside of China. Currently, the company’s existing capacity stands at 119.95 mtpa (grey cement) with a capacity utilisation rate of 77%.

“The company has more than doubled its capacity over the past five years and is committed to meeting India’s future needs for housing, roads, and other infrastructure. This investment is backed by a strong conviction on India’s growth potential as well as a deep and nuanced understanding of the market dynamics of the cement industry,” said Kumar Mangalam Birla, Chairman, Aditya Birla Group.