Mumbai: Cement major UltraTech Cement plans to increase its annual manufacturing capacity to 62 million tonnes by FY14 and has already undertaken a capital expenditure of Rs 12,000 crore for the expansion.
"The outlook for the cement industry remains challenging, but we are bullish on the sector. We have embarked on a plan to increase our capacity to 62 million tonne by the next fiscal," UltraTech's Chairman Kumar Mangalam Birla told shareholders at the company's 12th annual meet here on Thursday.
The total capex under implementation for these projects is around Rs 12,000 crore, which will be funded through a judicious mix of internal accruals and borrowings, he said.
UltraTech is currently developing clinkerisation plants at Chhattisgarh and Karnataka together with grinding units as well as bulk packaging terminals and ready mix concrete plants, besides a waste-heat recovery system.
"These expansions will increase the company's capacity by 10.2 million tonnes per annum (MTPA) to 62 MTPA," he said.
Besides, the company also plans to augment its power capacity to 659 MW by the next fiscal from the current 529 MW.
On the company being slapped with penalty for cartelisation by the Competitive Commission of India (CCI), Birla said, "We are completely protective (about our business)... We have not indulged in any activity that can be termed as being involved in any kind of cartelisation. We have made a representation to the appellate authority. We have raised some issues like there are 47 players in the cement industry, and therefore a cartel working with so many players with a high level of disintegration is actually not possible".
He also said that increasing cement prices was necessary as the cost of coal, diesel and other costs have gone up, besides freight rates.
"Since input costs have risen, it is inevitable to increase cement prices. Despite the increase in cement prices, they do not make up for the increase in cost," Birla said.