It is a race to retain market share between the top two, the Holcim group companies – ACC and Ambuja Cements – and UltraTech Cement of the Aditya Birla group.
The two are now running neck and neck in terms of installed capacity and have outlined plans for significant capacity additions over the new few years.
According to information available, ACC Ltd and Ambuja Cements Ltd – in both of which the Swiss cement maker Holcim has a nearly 45 per cent stake – have an installed capacity of about 46Mt.
The Aditya Birla group, through UltraTech Cement Ltd and Grasim Industries, has an almost similar installed capacity. Grasim’s cement business will shortly be merged with UltraTech.
The two groups have also been simultaneously increasing their captive power generation capacity. Along with plans for greenfield plants, the groups are also investing in captive power plants.
Ambuja Cements has about 20Mt of installed capacity. It will commission during the first quarter of 2010 (the two Holcim companies follow a January-December financial year) clinkerisation units in Rauri, Himachal Pradesh, and Bhatapara, Chhattisgarh, and a 1.5Mt grinding facility at Dadri in Uttar Pradesh. Ambuja Cements will also commission a 1.5Mt grinding unit in Nalagarh, Himachal Pradesh.
With these, the company’s capacity will go up to 25Mt. The installed capacity will increase to 27Mt by 2010-end, with grinding capacities being added in two existing plants.
ACC’s capacity of 26Mt is set to reach 30Mt during the year. In the first phase, it has added 2.7Mt of the planned 3Mt capacity in Karnataka, with a new clinker line in Maharashtra, of 3Mt capacity, expected to be commissioned in the third quarter of 2010.
Ambuja Cements has over 400 MW of captive power plants, while ACC met nearly 71 per cent of its power requirement from captive sources in 2009.
According to a recent presentation, a copy of which is available on UltraTech’s Web site, at the end of the third quarter of 2009-10 the group’s combined cement capacity was up 22 per cent to 45.65Mt. UltraTech is working on new growth plans, the presentation has said, and added that it will need about 25Mt of capacity in the next five years to maintain market share. The company has about 500MW of captive power plant capacity. UltraTech has said that captive power will account for up to 80 per cent of the company’s power requirements, especially with new power projects going on stream.
The cement business of the Aditya Birla group has about INR4110 crore (US$889.5m)of capital expenditure projects under implementation, of the planned INR9838 crore (2129m) outlay. It had spent INR5728 crore (US$1239m) up to last year.
The Holcim group companies and UltraTech expect a 10 per cent growth in cement demand in the medium term. UltraTech has said there was an emerging surplus scenario in cement capacity, which scenario was expected to continue for the next 18 to 24 months.
The country’s installed cement capacity is around 250Mt.