Dalmia adds 2.3Mta to Bengal capacity

Dalmia Cement (Bharat) Ltd has expanded its capacity in Bengal, India, by 2.3Mta to 4Mta. The expansion represents an investment of INR3.6bn (US$48.9m).

The company expects pent-up demand from infrastructure projects and affordable housing following business disruption due to the COVID-19 pandemic. Therefore, it is also adding 2.3Mta of brownfield capacity in Odisha and revamp the operations of Murli Industries in Maharashtra to add 3Mta.

“Today we are at around 29Mta approximately and we should be going to 31Mta by the first quarter of the next financial year and by the third quarter we should be around 34Mta,” said Ujjwal Batria, the company’s COO. He added that the company plans to produce blended cement to ensure reduced carbon footprint as part of its plans to become carbon negative by 2040.

Cement demand has been improving during the 3QFY20-21. “The pandemic had a big impact on the first quarter and there was low demand. But we have seen growth coming back in the third quarter. But even with this, growth for the year will be at around 3-5 per cent is what we anticipate today. We will also have the benefit of pent up demand. Lot of focus on infrastructure and low cost housing projects and this gives us hope that going forward demand will look up,” Mr Batria said.

Analysts are also optimistic about domestic cement demand, according to The Telegraph. “Buoyant demand scenario combined with support from offtake in government infrastructure projects provided a filip to the industry with current revised expectations of flattish growth for FY21,” said Kunal Shah, analyst, institutional equities, Yes Securities.