Birla Corporation plans to increase cement capacity to 20 mtpa

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Kolkata, July 20 (IANS) Birla Corporation Ltd, the flagship of the M.P. Birla Group, is planning to scale up cement production capacity to 20 million tonnes per annum (mtpa), in the next two-three years, an official said on Friday.

“We have a scope to expand within our cement business. We wish to take it up to 20 mtpa in the next two-to-three years. Some of it will be addition to our existing capacity and some could be in a new location,” company’s Chairman Harsh V Lodha said on the sidelines of its Annual General Meeting here.

The cement maker had achieved successful integration of operations of Reliance Cement Company (RCCPL), which it had acquired in August 2016.

This acquisition provided the company with the ownership of high-quality assets, taking its total capacity to 15.5 mtpa from 10 mtpa.

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The company, in the last fiscal, registered an increase of about 1.52 per cent in cement sales on standalone basis and nearly 23 per cent on a consolidated basis.

In absolute terms, the sale of cement on standalone basis increased to 79.48 lakh tonnes compared to 78.29 lakh tonnes in the previous year.

RCCPL sold 44.48 lakh tonnes of cement in 2017-18, according to information available in the company’s annual report.

“Despite a challenging environment, the company was able to ramp up volumes and realise enhanced level of energy benefits arising out of the acquisition of the plants of RCCPL. The operations of RCCPL have stabilised and its plants are achieving operating parameters that are among the best in the industry. The planned synergies, expected out of the acquisition, are also getting realized with successful integration of its operations with the company,” the annual report said.

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The cement industry witnessed significant pressure over the course of last year due to increase in various input costs including power, fuel costs on account of a sharp spike in pet coke and coal prices, Lodha said, adding that the operations were also impacted due to non-availability of railway rakes.

“While costs have increased but contrary to the perception, cement prices haven’t increased to that extent. But going forward, we hope with demand improving we will get fair price for cement in future to compensate for the rise in input costs,” he added.

Presently, more than 30 per cent of its sales come from the premium segment in volume terms and nearly 35 per cent in value terms.

The firm was planning to increase this volume share to 35 per cent and value share to 40 per cent moving forward, he added.

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