UltraTech Cement opts for captive power plants

Ultratech Cement Ltd has earmarked Rs 600 crore for installation of captive power plants, chiefly a 92-megawatt lignite-based plant at Gujarat Cement Works, which will be commissioned by July 2007. This will lead to savings in power costs of Rs 110 crore annually for the company, said Mr Kumar Mangalam Birla, Chairman, UltraTech, at the company’s AGM on Wednesday. An additional Rs 190 crore has been earmarked as capital expenditure towards de-bottlenecking plants and for introducing measures for operational efficiency, he said.

The debt-equity ratio of the company, which was 1.44:1 during 2004-2005, will be brought down to less than 1:1 by the financial year 2008, said Mr Birla. This will be done through internal accruals and replacement of high cost debt, he said. During the year gone by, the company raised Rs 500 crore and repaid long-term borrowings of Rs 612 crore, bringing down borrowing costs from 7.7 per cent in FY 04 to 6.8 per cent in FY 05. The company is expected to report a topline and bottomline CAGR of between 10 per cent and 15 per cent during the current year, said Mr Birla.