UltraTech Cement to spend Rs 11,000 crore on expansion

UltraTech Cement of the Aditya Birla group said it would spend Rs 11,000 crore in the next three years to add 9.2 million cement production capacity to take its combined capacity to over 61 million tonnes per annum (mtpa), more than double that of ACC's 30-million tonnes capacity.

"The company has a capital outlay of around Rs 11,000 crore to be spent over the next three years. These include setting up of additional clinkerisation plants at Chhattisgarh and Karnataka together with grinding units, bulk packaging terminals and ready mix concrete plants across the country," UltraTech said.

"Orders have been placed for major equipment for setting up the projects. These expansions are expected to be operational from early 2013-14 and will enhance the company's cement capacity by 9.2 mtpa," it added.

The firm on Tuesday announced the fourth quarter results and said surplus capacity in the industry would cause challenges in the future. It reported a net profit of Rs 726 crore for the fourth quarter ended March 31, up sharply from Rs 228 crore in the same period last year.

For the full year net sales stood at Rs 13,210 crore as compared to Rs 13,442 crore in the previous year.

Profit before interest and tax stood at Rs 2,063 crore as against Rs 3,319 crore in the previous year.

The results have been recast to include Samruddhi Cement Ltd's performance for like-for-like comparison and are strictly not comparable with the corresponding period of the previous year.

The board of directors has recommended a dividend of 60 per cent aggregating to a payout of Rs 164.42 crore. The firm will absorb the corporate tax on dividend amounting to Rs 26.67 crore, resulting in a total payout of Rs 191.09 crore, it said.

Meanwhile, ACC on a consolidated basis has reported 11 per cent decline in net profit at Rs 350 crore for the first quarter ended March 31, 2011 as against Rs 393 crore in the same period last year. However, on a standalone basis its net profit has gone up by 41 per cent to Rs 350 crore.

The consolidated turnover of the quarter was Rs 2,556 crore as against Rs 2,240 crore in the same period last year. "While the company's operations benefited from better volumes, realisations remained challenged by steep escalation in input costs," ACC said.

Despite this, the Indian cement industry witnessed capacity addition of around 28 MMT in 2010-11 over and above the capacity addition of more than 60 MMT in FY' 10 resulting into a surplus scenario, which may last for the next three years.

Courtesy: Mail Today