India’s leading cement producer, UltraTech Cement, has agreed to purchase a 1.1Mta grinding facility in Parli in Maharashtra for INR3.15bn (US$37.8m) from India Cements Limited.
UltraTech, a subsidiary of the Aditya Birla Group, will also invest INR5.04bn to expand its total capacity by 3Mta, including the Parliament facility.
The acquisition of the facility, as part of an asset purchase agreement, includes a captive railway siding. The company has stated that purchase will help the company embolden its presence in the Maharashtra market.
Once the acquisition is complete, UltraTech will invest INR1.66bn at the grinding unit to increase its capacity to 1.2Mta. It will invest a further INR3.38bn to expand at its Dhule plant in Maharashtra by 1.8Mta.
The expansion, which is to be funded using internal accruals, will enable future growth. UltraTech has a total capacity of 147.3Mta (domestic grey cement) and a capacity utilisation of 80 per cent during the nine-month period ending December 2023.
In April 2023 UltraTech had designated INR324bn in capital expenditure for the next three years of expansion and the completion of its acquisition of Kesoram Cement. UltraTech is expected to expand its production capacity to 198.2Mta.
