UltraTech Cement Ltd plans to invest Rs 11,000 crore over the next three years to increase its production capacity.
“The cement sector in India has high growth potential. We are exploring both organic and inorganic means to grow our production capacity,” Mr Kumar Mangalam Birla, the company's chairman said at the 11th annual shareholders' meeting on Friday. He said the company plans to raise its production capacity by 9 million tonnes a year by June 30, 2013.
Many projects
The capital expenditure pertains to a number of projects, including clinkerisation plants through brown-field expansion at Chhattisgarh and Karnataka and additional grinding units, installation of waste recovery heat systems and institution of bulk packaging terminals and establishment of ready-mix concrete plants.
“These projects will be funded through a judicious mix of internal accruals and borrowings,” said Mr Birla.
The cement sector witnessed demand growth of around 8 to 10 per cent in the past decade.
Mr Birla said India's cement demand is expected to grow by 8.5 per cent a year in the long term, with the Government investing in development of infrastructure, while a boom in the housing sector would help as well.
Ultratech, one of India's largest cement producers by volume, has a production capacity of 52 million tonnes a year. The company has recommended a dividend of Rs 6 per equity share.
The dividend distribution will result in a cash outgo of Rs 191 crore compared to Rs 87 crore for the previous year.