Cement output to grow slower: Kumar Birla

Mumbai: The cement industry in India will see a production growth of 6 per cent in the current financial year, said Kumar Mangalam Birla, chairman, Aditya Birla Group. The growth will be the lowest since 2004-05.

In FY08, the Rs 85,000-crore cement industry produced 168.31 million tonnes against 155.66 million tonnes in the previous year, up 8.13 per cent. In the absence of B K Birla, he was chairing the annual general meeting of Century Textiles and Industries (CTIL) on Wednesday.

He said that with the slowdown in the economy and inflation at its highest in over a decade, the cement industry is going to see a surplus situation in the next two years. CTIL has earmarked Rs 6,300 crore as capex for its cement, textiles and paper businesses. The amount, to be partly raised from debt and internal accruals, will be spent in course of the next five years.

For cement, the company has earmarked a sum of Rs 1,800 crore for expanding capacity by 4 million tonnes, from the current 7.8 million tonnes to 1.8 million tonnes.

The company is coming up with greenfield units in Manikgarh district in Maharashtra and Murshidabad district in West Bengal. Clearances from the concerned department of the respective states are being awaited and the company will place orders for equipment once all approvals are on the table.

Similarly, the company will invest Rs 1,445 crore in the paper division and the rest will go to its new unit in Bharuch (Gujarat) and on the development of its closed mill at Worli in Mumbai.

The company has plans to use the mill land for commercial purposes, which include hospitality and IT-enabled services. The mill land is spread over 40 acres with the mill spread over 30 acres and the rest housing its workers.

The Bharuch plant has started trial production and commercial production is expected in September.

'The capacity expansion for cement is expected to be operational within three years from the placement of orders for the plant and machinery,' said Birla.

With the government's focus on education, the company expects a good demand for paper. The company expects good returns from new investments in the sector, including on a new unit in Uttarakhand, he added.

Rising cotton prices is a cause of concern for the company. Birla said that with the steep rise in cotton prices, rates of denim and yarns have to be increased.

On the question of merging cement business of the B K Birla Group with the Aditya Birla Group, R K Dalmia, president, CTIL, said, 'There are no plans and no discussions on this front.'