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Grasim to invest additional Rs 6400 cr in expanding capacity to meet demand

BS Reporter/Mumbai 24 May 19 | 08:45 PM

Aditya Birla group’s Grasim Industries plans to invest an additional Rs 6,400 crore in expanding its capacity as its existing plants are unable to meet the growing demand from local customers.

Dilip Gaur, managing director of Grasim, said the investment would be made in the speciality fiber business and would increase its capacity by about 40 per cent in the next two years. “We have invested Rs 7,000 crore in the last 10 years and will invest a similar amount in the next two years as demand is fast picking up. We have to divert our exports consignments to the domestic market to cater to the demand," he said.

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The additional capacity will be commissioned at the Vilayat plant in Gujarat in two years' time. Grasim also holds stake in Ultratech and Aditya Birla Financial Services.

Sushil Agarwal, Grasim’s outgoing Chief Finacial Officer, said as Grasim mirrors the trend in the economy, the company expects the government’s focus on the infrastructure sector to boost the demand for cement and financial services business in the coming quarters.  “With the government planning to invest heavily in building infrastructure, it would boost all our business," said he.

"The government's thrust on infrastructure development like construction of cement concrete roads, metro rail networks, airports, irrigation projects and increase in the pace of  execution under the low cost housing program supported strong  volume off-take of cement," the company said in a statement. "All of these are expected to result in sustained demand growth for cement going forward. This augurs well for the industry," he said.

For the quarter ended March 2019, the company posted a net profit of Rs 451 crore and revenues of Rs 5,453 crore on a standalone basis.  Revenue from operations for the year on a stand-alone basis was Rs 21,118 crore, while net profit for the year was 515 crore. The results are not comparable with that of the previous period as they include financial results of Viscose Filament Yarn  (VFY) business of Century Textiles and Industries, whose  management rights were acquired by the company, and cement plants acquired  from Jaiprakash Associates and Jaypee Cement Corporation. The results also include the financial results of erstwhile Aditya Birla Nuvo Limited (ABNL) and its subsidiaries.

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