Birla Corp aims 20 MT to become fifth largest cement company in India

26/01/2020

Kolkata: Birla Corporation is increasing its total manufacturing capacity to around 20 million tonnes per annum (mtpa) spread across western, northern and central India in the next three years which will provide the company ample markets to scale up its other products as well as roll out new ones.
It is already constructing a new 3.9 mtpa plant, a 40MW plant and a 10.6MW waste-heat recovery plant at Mukutban in Maharashtra with an investment of Rs 2,450 crore, which is expected to be commissioned by the second quarter of the FY2021-22. Once completed, it will catapult the company’s installed capacity from the existing 15.58 mtpa to 19.48 mtpa which would bring it neck-to-neck with Ramco Cement. The latter has a current installed capacity of 16.69 mtpa.
According to brokerage firm Anand Rathi, another 1.2 mtpa expansion of its cement grinding plant at Kundanganj in Uttar Pradesh is also on track which may be commissioned by the end of the next fiscal year. Besides, the clinker expansion of 480,000 tons at the NCCW plant at Chanderia has begun to fulfill the additional clinker needs of the Kundangunj grinding unit.
Birla Corporation declined to comment on this development.
However, sources added that Birla Corporation is also considering adding another production line at its existing unit at Maihar in Madhya Pradesh although a final call is yet to be taken.
While the Mukutban project has been financed by a Rs 1,625 crore term loan stretching 12 years from a consortium of four banks led by the Bank of Baroda at less than 9 per cent interest, another Rs 2,500 crore will be invested over other projects. According to Yes Securities, the capacity addition plan of 5.2 mtpa in Uttar Pradesh and Maharashtra will translate into growth of 33 per cent in capacity to 20.5 mtpa, making it the fifth largest cement group in India. Currently, the MP Birla Group company is ranked seventh in the country in terms of installed capacity.
However, Sandip Ghose, chief operating officer at Birla Corporation, is of the view that once the company is able to scale up its installed capacity, which in turn, would translate into market share gains and more visibility, it could give the company the opportunity to enter new categories within cement as well as emerge as a serious player in building and construction solutions.
“For example, we are not present in concrete and do not have any research facility now. We can look at those things once we have a sizeable installed capacity and an increased exposure to the market”, Ghose told.
It has already ventured into the construction chemicals market with wall putty products and waterproofing compounds. Water repellents and other products are under consideration.
Industry officials suggested that the additives market in the country is estimated at around Rs. 1390 crore and is growing at a rate of 12-25 per cent depending on the category of the chemical. While wall putty which has a 60 per cent market penetration, and offers a 25 per cent margin, construction chemicals has an extremely low level of market penetration of seven per cent, but offers a 40 per cent cut for the company.

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