UltraTech to commission 2 new units to surpass 150 mtpa capacity

Aditya Birla Group's cement flagship company UltraTech Cement has commissioned two new greenfield capacities totalling 5.4 million tonnes per annum in the states of Chhattisgarh and Tamil Nadu, taking its total capacity to 151.6 mtpa.

This capacity is more than 150% of the capacity in the United States and 80% of Europe's capacity, the cement maker says in a regulatory filing.

UltraTech Cement says it will invest ₹32,400 crore towards ongoing capex over the next three years.

"It took 36 years for the cement business of the Aditya Birla Group, to get to a capacity of 100 mtpa. And UltraTech has subsequently added the next 50 mtpa in less than 5 years with an investment of around ₹32,000 crore," it says.

"Reaching this milestone is symbolic of India’s ascent on the global stage and demonstrates the dynamism and scale of Indian corporations," says Kumar Mangalam Birla, chairman, Aditya Birla Group.

“With a mix of integrated cement plants, grinding units, bulk terminals across 59 locations in India along with 307 ready mix concrete plants, UltraTech’s scale and capacity footprint is unparalleled. And this scale will further enable UltraTech to service India’s growing demand for cement across the country,” he says.

Over the last 12 months, UltraTech has expanded its capacity by 18.7 mtpa. In addition to that, the ongoing expansion of 35.5 mtpa is actively being implemented across 16 locations. In addition, the company is in the process of closing the proposed acquisition of Kesoram Cement. This will further augment UltraTech’s grey cement capacity to 198.2 mtpa.

“This achievement is a significant milestone in UltraTech’s transformative growth journey. It has been our constant endeavour to drive sustainable growth by delivering superior value to all stakeholders. India’s strong growth trajectory provides the cement sector significant headroom for long term growth. As India’s leading cement and ready-mix-concrete company, UltraTech is well placed to support the country in its exciting growth journey ahead,” says KC Jhanwar, managing director, UltraTech Cement.

Shares of UltraTech rose as much as 2% in intraday trade on Wednesday to ₹10,273 on the BSE.

UltraTech holds around 22% capacity share across India, according to Moody's. In January, the rating agency affirmed UltraTech Cement’s Baa3 issuer rating as well as its Baa3 senior unsecured rating. "The affirmation reflects UltraTech's solid balance sheet and substantially strong credit metrics for its Baa3 ratings," said Kaustubh Chaubal, Moody's senior vice president.

Moody's projects India's demand for cement to grow annually at approximately 6% over the upcoming years, primarily driven by the housing sector, which constitutes 60-65% of the country's cement consumption. India's long-term trend in demographic growth will underpin a surge in housing demand, and consequently for building materials like cement. Concurrently, India's escalating urbanisation and development of infrastructure such as roads, ports, and airports will further bolster cement demand.