UltraTech Cement has crossed the 200 million tonnes per annum (mtpa) installed capacity mark in India, chairman Kumar Mangalam Birla announced on Friday. The company is now world’s largest cement producer outside China.
"Today, with the commissioning of three plants at Visakhapatnam in Andhra Pradesh, Shahjahanpur in UP, and Patratu in Jharkhand, UltraTech’s cement capacity will increase to over 200 million tonnes per annum," the chairman said at an event in Mumbai.
Of the total, around 90 million tonne capacity has come via acquisitions. The company’s acquisition-led growth began with the L&T cement business and expanded through deals involving Jaypee, Binani, Century, Kesoram and, most recently, India Cements.
“It took us 36 years to reach 100 million tonnes. The next 50 million followed in five. The 50 after that, in just over two,” Birla told a gathering of media and company employees. “Back in 2019, I had said that scale is not everything. It is the only thing. This 200 million tonne milestone makes me reflect on that, yet again.”
Expansion plans
UltraTech’s aggressive scale push contrasts with rival Ambuja Cements, part of the Adani Group led by Gautam Adani. Ambuja has indicated it will prioritize profitability and capacity utilization over rapid expansion, and may defer its target of reaching 155 mtpa capacity by FY28, Mint reported earlier. It currently has a capacity of about 109 mtpa, making it the second-largest cement maker in India.
UltraTech has now set its sights on scaling capacity further to 240 mtpa by FY28, with an investment of ₹16,000 crore. The expansion comes at a time when the industry is grappling with rising input and energy costs due to the Iran war.
“Geopolitical disruptions will intensify cost pressures for cement makers in the first half this fiscal. A surge in energy prices, which will have a pronounced impact on power and fuel expense, and a moderate increase in raw material and freight cost will push total cost up 4-6% this fiscal," said Sehul Bhatt, director at Crisil intelligence in a 13 April note.
The dual tailwinds of an increase in prices, excluding goods and services tax, and a growing trend of premiumization are likely to aid realizations, Crisil Intelligence said, adding that there could, however, be risk to margins from higher costs.
