India: ACC Ltd to raise capacity to over 33Mta

ACC Ltd will spend about INR6000 (US$89.9m) in 2016-17 to complete its cement capacity expansion plans. ACC is building two cement units at Jamul and Sindri with a combined capacity of 2.4Mta. Following completion, the plants are expected to take the company's total capacity to 33.42Mta.

"The planned capital expenditure for 2016 is about INR6000 to be used to complete the expansion plans at Jamul (in Chattisgarh) and Sindri (in Jharkhand)," Harish Badami, chief executive officer and managing director for ACC said at the company's annual general meeting (AGM) on Wednesday.

"These plants [Jamul and Sindr] will go on stream in the next few months," Badami said while talking on the sidelines of the AGM. The company has no plans to add fresh capacity.

Badami added there is enough capacity where utilisation levels can be improved. For 2015 ACC's overall capacity utilisation was at 77 per cent. The company expects cement prices to improve as demand growth is projected to touch six per cent in 2016 from two per cent in 2015.

"2015 was most challenging in terms of demand growth, excess capacity and declining prices. Forecasts for India's GDP growth in 2016 and in the short term are of the order of seven to eight per cent. There can be no doubt that this growth necessitates urban transformation, major advancements in infrastructure, connectivity, housing and sanitation," Mr Badami said at the AGM, adding that he expects cement demand to grow in line with the GDP in the next 3-5 years.