Cement Demand To Cross 640 MTPA By FY30, Says UltraTech

Cement demand is expected to cross 640 million tonnes per annum by FY30, said leading player and Aditya Birla group flagship firm UltraTech Cement in an investor presentation. It expects the cement demand to have a compound annual growth rate (CAGR) of 7 to 8 per cent between FY24 and FY30, citing industry estimates and research reports. The cement demand was at 424 MTPA in the financial year which ended on March 31, 2024, according to the investor presentation, a copy of which was submitted to exchanges last week.

The "cement demand expected to cross 640 MTPA by FY30," said UltraTech Cement Ltd. The company is expanding its grey cement production capacity and has projected to have 209.3 MTPA output by FY27. UltraTech's capacity has increased to 182.8 MTPA so far in FY25, which includes 5.4 MTPA in overseas, from an overall 140.8 MTPA of FY24. The Aditya Birla group firm is expanding its capacity through acquisitions and brownfield as well as greenfield expansions. It plans to add 26.5 MTPA in FY26 and FY27. It is "pivoting to pan-India presence with 82 locations", said UltraTech.

In the cement business, the firm is expanding its capacity through acquisitions and capacity enhancement as it faces competition from billionaire Gautam Adani-led Adani Group's Ambuja Cement, which is the second largest player and is also scaling its capacity. The company also operates 4,432 UltraTech Building Solutions outlets across the country, which provide a "one-stop building solution for the retail customer".

It also "helps to increase the share of customer wallet to 60 per cent", said UltraTech. Last week, UltraTech Cement announced its foray into the wires and cables segment. It will invest Rs 1,800 crore over the next two years to set up a plant near Bharuch in Gujarat, which is expected to be commissioned by December 2026. UltraTech said from its new segment, it is looking at an IRR (internal rates of return) of 25 per cent with a Return on Capital Employed (RoCE) target of over 20 per cent.

Its upcoming plant at Jhagadia, Gujarat will have a "capacity of 35 to 40 lakh km". It will produce wires and cables of "low tension, control, instrumentation, flexible, rubber, etc". The cables & wires segment is "projected to grow at 13 per cent over the next 5 years", it said. UltraTech's revenue in FY24 was at Rs 68,640.63 crore. Shares of UltraTech Cement Ltd were trading at Rs 10,363.15 on BSE, up 2.46 per cent from previous close.

(PTI)