Birla Corporation, the flagship Company of the M.P. Birla Group, is planning to increase cement production to 25 million tonnes per annum (MTPA) by the end of financial year 2025-26. The existing capacity of Birla Corporation headed by Harsh V. Lodha stands at about 20 MTPA. The company is planning to ramp up its production capacity from a greenfield cement plant at Mukutban near Nagpur, setting up a a second clinker unit at Maihar in Madhya Pradesh and constructing new grinding units in north India.
“With the commissioning of Mukutban we have virtually ring-fenced our core market of Central India – which we can service seamlessly from our six plants, namely Maihar, Satna, Kundangunj, Raebareli, Chanderia and, now, Mukutban,” Mr. Lodha told shareholders during the 103rd annual general meeting of the company here on Tuesday. The strategic location of these plants and standardisation of product quality allows us to interchange source of supplies to maximise realisation and serviceability for our customers, the Birla Corporation Chairman added.
Mr. Lodha also spoke about the challenges with the cement plant and added soon after it was commissioned in April 2022, “we ran into headwinds of exorbitantly high power and fuel prices, triggered by Ukraine–Russia war”.
The current capacity utilisation of Mukutban, which has an installed production capacity of 3.9 million tonnes, stands at 40-45%. With the extended project completion time resulting in the cost of the plant going up by ₹300 crore, primarily on account of interests during construct, the Mukutban project came at a cost of ₹2,744 crore.
“We are working on exit target this year of 2 lakh metric tonnes and next year it will ramped up to 2.5 lakh metric tonnes,” Birla Corporation managing director and chief executive officer Sandip Ghose told reporters in a media conference post AGM.
Mr. Ghosh added that the company plans to raise its EBITA to ₹850 per tonne by this fiscal end from ₹664 per tonne at the end of the first quarter which would come from higher capacity utilisation and optimisation of cost and sale.
On the raw material and energy security front, the company officials said that limestone from Mukutban mines and the limestone from other mines would also come at a low price. The company has been allotted captive coal mines of Bikram and Marki Barka. While mining at Bikram is expected to start later in this financial year, Marki Barka mine is expected to be operational in the financial year 2025-25. “Once operational, these mines will not only lead to savings in the fuel cost but also provide a high degree of fuel security to the company. With the commissioning of these coal mines, we would have one of the highest sources of captive fuel for kiln [more than 55 %] in the industry — insulating us from vagaries of the market,” Mr. Lodha said.