Ultratech Cement will invest INR 11,000 crore to jack up its production capacity by 10 million tonnes per annum to 62 million tonnes per annum by the first quarter of 2013-14 fiscal.

Ultratech Cement in a letter to the shareholders said that "The company has a capital outlay of INR 11,000 crore to be spent over the next three years ... Orders have been placed for major equipment. These expansions are expected to be operational by Q1 FY14.”

The company will use the proposed fund on clinkerisation plants through Brownfield expansions at Chhattisgarh and Karnataka, installing waste heat recovery systems, instituting bulk packaging terminal and setting up of ready mix concrete plants.

Ultratech said that "Upon completion of this round of CAPEX, company's cement capacity will stand augmented by 10 million tonnes per annum to 62 million tonnes per annum, captive power from 504 MW to 674 MW and generation of green power through waste recovery from 4 MW to 65 MW,"

The capacity expansion was being funded through a mix of internal accruals and borrowings, it said, adding that it has spent over INR 1,100 crore on various CAPEX initiatives so far during the first half of the current fiscal.

Meanwhile, the company said the current surplus scenario in the domestic market was likely to continue for the next 2 to 3 years, but the growing input costs would squeeze margins.

It aid that "Over the long term, the sector is likely to grow over 8% on the back of government's focus on infrastructure development and housing. Further, the enhanced capital allocation towards infrastructure in the 12th Five Year Plan will give the desired push to the sector.”

(Sourced from PTI)