Birla: Big plans

Mumbai, Aug. 28: Ultratech Cement has drawn up a Rs 1,424-crore capex plan for the next three years, said chairman Kumar Mangalam Birla at the company’s annual general meeting.

Of this, Rs 844 crore has been earmarked for the installation of captive power plants at the Birla group company’s units in Gujarat and Chhattisgarh.

“To cater to the growing demand for cement and increase its market share in the south, the company will additionally invest Rs 1,274 crore towards a 4-million-tonne-per-annum capacity expansion at its plant in Andhra Pradesh.

This is inclusive of setting up of a 1.30-million-tonne-per-annum split grinding unit and a 46-mw captive thermal power plant,” Birla said.

The company has also declared a dividend of Rs 1.75 per share, a 133 per cent increase from 75 paise per share paid in the previous year. The total outgo on account of dividend will be Rs 24.85 crore against Rs 10.60 crore in the previous year.

Birla told the shareholders, “The government’s initiatives on infrastructure development and the boom in the housing sector are major growth drivers for the cement industry. The Indian cement sector is the second largest in the world after China. Regardless, the per capita consumption of cement in India is just 125 kg, which is very low in comparison with the average world consumption of 267 kg, underlining its tremendous growth potential. In the medium term, the demand and supply situation is expected to be balanced, with a couple of years before the next cycle of new capacity enters the market.”

The company’s performance has also improved in 2005-06. The aggregate sales volume grew by 2.50 per cent to 15.55 mmt.

Domestic volume growth at 9 per cent was on a par with the industry.