UltraTech on track to raise capacity by 19% next year

UltraTech, India’s leading cement producer, said it will raise capacity to 62Mt by next year, according to its chairman, as he warned that the outlook for the domestic sector remains challenging.

"I believe the short-term prospects for the industry appear bearish. Regardless, over the medium to long term, the sector offers good growth potential," Kumar Mangalam Birla said in a statement released after the company's annual shareholder meeting.

Rising input and energy costs have been squeezing margins while demand has been subdued amid a weakening economy and high interest rates which have slowed housing and infrastructure development.

Capacity at UltraTech, part of the diversified Aditya Birla Group, will be raised by 19 per cent in the next fiscal year that starts in April 2013 from 52Mt to 62Mt. Most of the expansion and modernisation projects will go on-stream in early 2013-14, he said. These will include development of clinker plants at Chhattisgarh and Karnataka along with grinding units, bulk packaging terminals and ready mix concrete plants and waste-heat recovery systems. The company will also enhance its power capacity to 659 megawatt (MW) from 529MW.