Ultratech to spend Rs 11K cr in 3 yrs on expansion: Birla

Ultratech Cement, an Aditya Birla group company will incur a capital outlay of Rs 11,000 crore over the next three years for expansion of its major projects in Chattisgarh and Karnataka among other states.

While addressing shareholders at the 11th annual general meeting of the company, chairman Kumaramangalam Birla said these expansions are expected to be operational by June quarter of FY14 and will enhance the company's cement capacity by 9.2 million tonne per annum. He further said these projects will be funded through a mix of internal accruals and borrowings.

Referring to uncertainties in the global economy, Birla said, at a time when the cement industry is faced with a host of challenges like high input cost and sluggish demand, margins are bound to under pressure in the coming quarters.

Meanwhile, Ultratech Cement had posted a 6% decline in profits for the June quarter at Rs 683 crore on revenues of Rs 4365 crore. Birla said these results were mainly due to poor pricing power and lower volume growth. Alongside, imported coal price also rose 30% year on year, resulting in substantial escalation in cost.

The surplus scenario is likely to continue over the next tow to three years resulting in prices remaining under pressure.  However, while answering shareholder queries, Birla said the second largest cement company in India is exploring both organic and inorganic growth to further strengthen its position.

Currently, Ultratech has a capacity of 52 million tonne to around 72 million tonne are afoot.

Shaheen Mansuri
Moneycontrol Bureau