(Eds: Adding management quotes and more details)
Mumbai, Feb 14 (PTI) Aditya Birla Group firm Grasim Industries has received board approval for a Rs 3,523-crore viscose staple fibre (VSF) brownfield expansion plan to meet the growing demand.
The proposed project is expected to be commissioned by the financial year 2021.
"The company has a total capex plan of Rs 6,440 crore for expansion over the next two years. The board has approved VSF brown field expansion plan at Vilayat in Gujarat at an estimated cost of Rs 3,523 crore," Dilip Gaur, managing director, Grasim Industries told reporters here today.
Along with on-going expansion and debottlenecking, Gaur said the total capacity is projected to increase by 58 per cent from the current level of 498,000 tonne per annum.
The expansion plans will be funded in a phased manner through internal accruals only as the company has a strong balance sheet net cash surplus of Rs 600 crore at standalone level, according to Sushil Agarwal, chief financial officer, Grasim Industries.
"The company has already spent Rs 700 crore in the nine-month period ended December 2017," he said.
Meanwhile, the company reported a consolidated net profit at Rs 786.87 crore for the quarter to December. The consolidated profit after tax, before share in profit/loss of joint ventures and associates and minority interest, at Rs 1,125 crore , grew by 22 per cent year on year.
The company said figures for the period are not comparable due to the merger of Aditya Birla Nuvo Ltd and acquisition of cement plants by its subsidiary Ultratech Cement from Jaiprakash Associates Ltd and Jaypee Cement Corporation last year.
"Revenue is not comparable on account of GST implementation from July 1, 2017," it said.
Total income during the quarter stood at Rs 15,523.75 crore. It was Rs 9,743.51 crore in the corresponding period last year.
During the quarter ended December 2017, the uptrend in domestic caustic soda prices continued, driven by supply related issues in China and Europe and robust demand from major consuming segments. The management continued to focus on increasing the volume of chlorine-based value added products.
The company sees higher demand for VSF, chemicals, caustic soda and cement in the domestic market due to countrys growing economy.
Commenting on future outlook, Gaur said, the VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through brand Liva and enriching the product mix through a larger share of specialty fibre.
The new capacities likely to come on stream in China may impact the global VSF prices in the near term, he said.
Gaur expects the demand for caustic soda in the domestic market to grow with rising consumption from the alumina and textile sectors.
Government spending on infrastructure, rural and affordable housing will be the key demand drivers for the cement industry, he said, adding, "following acquisition of Jaypee Cements, the company is well positioned across the country to cater to this growth in demand, Gaur said. PTI AP SS BEN