Birla Corporation, the flagship company of the M.P. Birla Group, has set its sights on expanding its cement production capacity to 25 million tonnes per annum (MTPA) by the end of the financial year 2025-26. Currently, the company has a capacity of about 20 MTPA. To achieve this growth, Birla Corporation plans to implement various projects, including setting up a greenfield cement plant at Mukutban near Nagpur, a second clinker unit at Maihar in Madhya Pradesh, and constructing new grinding units in north India.
The primary objective of these expansion projects is to strengthen the company’s presence in its core market of Central India. With the commissioning of the Mukutban plant, Birla Corporation will have six plants, namely Maihar, Satna, Kundangunj, Raebareli, Chanderia, and Mukutban, strategically located in the region. This strategic positioning, along with standardization of product quality, allows the company to efficiently serve its customers by optimizing the source of supplies to maximize realization and serviceability.
During the recent annual general meeting, Harsh V. Lodha, the Chairman of Birla Corporation, highlighted the challenges faced by the company, especially after the commissioning of the Mukutban plant in April 2022. The sharp increase in power and fuel prices due to the Ukraine-Russia war had a significant impact on the operations. However, despite these challenges, the current capacity utilization of the Mukutban plant stands at 40-45% of its installed capacity of 3.9 million tonnes.
Birla Corporation’s managing director and chief executive officer, Sandip Ghose, mentioned that the company is targeting an exit capacity of 2 lakh metric tonnes for this fiscal year, which will be further ramped up to 2.5 lakh metric tonnes in the following year. This increase in production capacity, along with the optimization of costs and sales, is expected to enhance the company’s EBITA to ₹850 per tonne by the end of this fiscal year compared to ₹664 per tonne at the end of the first quarter.
In terms of raw material and energy security, Birla Corporation is well-prepared. The limestone required for production comes from the Mukutban mines and other sources, ensuring a steady supply at affordable prices. Additionally, the company has been allotted captive coal mines, Bikram and Marki Barka, which will further enhance its fuel security. The Bikram mine is expected to begin operations later this financial year, while the Marki Barka mine is projected to be operational by 2025-26. These captive coal mines will not only help reduce fuel costs but also insulate the company from market fluctuations, as they will provide a significant proportion (over 55%) of captive fuel for kiln, one of the highest in the industry.
With its expansion plans and focus on optimization, Birla Corporation is poised to significantly increase its cement production capacity and strengthen its position in the industry.
