UltraTech To Spend Rs 12,886 Crore To Expand Capacity
UltraTech Cement Ltd. announced plans to invest Rs 12,886 crore to expand capacity, days after billionaire Gautam Adani agreed to buy India's second-biggest cement business from the Holcim Group.
UltraTech's board approved a mix of brown field and green field expansion to increase its capacity by 22.6 million tonnes per year, according to an exchange filing by India's largest cement maker. New capacities will start production by the year through March 2025, taking total production capability to 159.25 MTPA.
The expansion includes integrated and grinding units, and bulk terminals across the country. It would cost $76 per tonne of cement.
That's lower than the $162 a tonne the Adani family has agreed to pay for Holcim's India arms. He is acquiring Ambuja Cements Ltd. and ACC in a deal worth $10 billion (more than Rs 81,000 crore), including an open offer, for a total capacity of 70 MTPA.
Kumar Mangalam Birla, chairman of the Aditya Birla Group that controls UltraTech, had told BQ Prime in Davos that Ambuja-ACC did not make sense for the group financially. “Price is in the eyes of the beholder,” he said. “I don't think we could have created value as much as we can in other options that we're looking at.”
Fresh investments into the cement sector have been driven by the government's infrastructure push and an anticipated capex cycle.
Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.
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