UltraTech Cement, an Aditya Birla Group company, has set a target to achieve 200 million tonne per annum production capacity as competition in the sector is fast catching up.
Addressing shareholders, Kumar Mangalam Birla, Chairman, UltraTech Cement, said the company has doubled its grey cement production capacity from 66.3 mtpa in FY16 to 132.4 mtpa last fiscal.
It commissioned an additional 12.4 mtpa last fiscal and another 5.5 mtpa will go on stream in this fiscal increasing cement production capacity to 137.85 mtpa.
Work has already started for the next growth phase of 22.6 mtpa additional capacity to take the company’s cement production capacity to over 160 mtpa, he said.
“We are not content with just that. UltraTech is now targeting an ambitious goal of achieving a production capacity of 200 million tonne to further reinforce its position as one of the largest cement companies in the world,” said Birla.
The strength of the company is exemplified by the fact that it has generated positive cash flow even after meeting all on-going capex, working capital and dividend payment requirements, and has still been able to deleverage a bit, he added.
Despite weaker global growth in the current year, Birla said there is room for cautious optimism about a subsequent recovery, as global financial markets have held up reasonably well.
The Indian economy presents a robust picture with strong domestic impulses outweighing negative global slowdown effects. High-frequency indicators reflect resilience in domestic economic activity, and inflation is moderating towards the Reserve Bank of India’s target level, he said.
India’s sound macroeconomic fundamentals provide comfort amid global risks, with moderating inflation, easing current account deficit, and improved foreign exchange reserves.
Fiscal consolidation is on track despite substantial increases in government capital expenditure. Public investments, particularly in critical infrastructure, are making the economy future-ready, while pragmatic industrial policies and production-linked incentives schemes will stimulate private capex, he said.
These initiatives, combined with improved balance sheets of banks and corporates and the dynamism of the technology-based ‘new economy,’ create promising medium-term growth prospects for the Indian economy, said Birla.
India today occupies a pride of place among the largest economies of the world. While the major global economies are still weighed down by stagflation, India has shown resilience in its continued growth momentum.
UltraTech anticipated and capitalised on the opportunities and this foresight not only enabled it to navigate short-term challenges effectively but also to turn them into springboards for transformative growth, he said.