Birla Corp to invest in cement plant
Birla Corporation Limited, the flagship company of M P Birla group, which has taken over Reliance Cement, plans to invest Rs. 2,400 crore in a green field cement plant at Mukutban near Yavatmal district.
The company will now be putting up the investment proposal before its board of directors for approval. “We are planning to invest around Rs. 2,400 crore for the four million tonnes per annum (mtpa) greenfield cement plant at Mukutban. We will now go to the board for approval,” said Harsh V Lodha, chairman of Birla Corporation, through a press release after the company’s AGM was held on Monday.
Lodha said after the completion of the new plant, its total cement production capacity would touch 20 mtpa as against 15.5 MTPA, after acquisition of Reliance Cement. Funding of the project would be through a mixture of debt and internal accruals, he said.
Rich in limestone deposits, it is coming up as a major destination for cement units. Birla Corporation had acquired cement plants of Reliance at a consideration of Rs. 4,800 crore. The company had secured loan of Rs. 1,000 crore on its books to fund the acquisition.
Lodha said the company was incurring capital expenditure at the acquired plants to make it more efficient. “Reliance’s plants did not have a captive power plant. So, we are in the process of setting up a waste heat recovery system at a cost Rs125 crore,” he said.
The company is also studying the feasibility of a captive thermal power plant there, Lodha said, adding that the demand for cement was rising in Central India and no new capacity was coming up in the region.