UltraTech Cement Achieves Record Capacity, Surpasses 200 Million Tonnes Per Annum

UltraTech Cement Surpasses 200 Million Tonnes Per Annum Capacity Mark in India

UltraTech Cement has achieved a significant milestone by crossing the 200 million tonnes per annum (mtpa) installed capacity mark in India, announced chairman Kumar Mangalam Birla on Friday. This achievement makes UltraTech the world's largest cement producer outside China.

The company's cement capacity will increase to over 200 million tonnes per annum following the commissioning of three plants at Visakhapatnam in Andhra Pradesh, Shahjahanpur in Uttar Pradesh, and Patratu in Jharkhand. This expansion is a result of the company's acquisition-led growth, which began with the L&T cement business and expanded through deals involving Jaypee, Binani, Century, Kesoram, and India Cements. Approximately 90 million tonnes of the total capacity have come via acquisitions.

UltraTech's chairman reflected on the company's growth, stating that it took 36 years to reach 100 million tonnes, the next 50 million followed in five years, and the 50 after that in just over two years. This milestone makes UltraTech a leading player in the Indian cement industry.

Comparison of UltraTech Cement and Ambuja Cements Capacity

| Company | Current Capacity (mtpa) | Target Capacity (mtpa) | | --- | --- | --- | | UltraTech Cement | 200 | 240 | | Ambuja Cements | 109 | 155 |

UltraTech's expansion plans contrast with those of rival Ambuja Cements, part of the Adani Group led by Gautam Adani. Ambuja has indicated that it will prioritize profitability and capacity utilization over rapid expansion, and may defer its target of reaching 155 mtpa capacity by FY28. UltraTech, on the other hand, has set its sights on scaling capacity further to 240 mtpa by FY28, with an investment of ₹16,000 crore.

The expansion comes at a time when the industry is grappling with rising input and energy costs due to the Iran war. Crisil Intelligence has forecasted that cement makers will face a 4-6% increase in total cost due to rising energy prices, raw material, and freight costs. However, the dual tailwinds of an increase in prices, excluding goods and services tax, and a growing trend of premiumization are likely to aid realizations, albeit with a risk to margins from higher costs.