Ambuja Cement: Ambuja plans to ramp up capacity to 50 mtpa in the near term

Cement maker Ambuja Cement will be ramping up capacities to reach around 50 million tonnes per annum in the near term from its current capacity of 29.65 MTPA with a mix of greenfield and brownfield projects.

“We expect our expansion plans to add around 15 MTPA capacity in the midterm taking our total cement capacity to 50 MTPA,” said the company’s chairman Martin Kriegner during its virtual annual general meeting held on Friday

The company’s upcoming facility in Marwar Mundwa, Rajasthan will enhance clinker capacity by 3 MTPA and help improve cement sales by 5 MTPA, Kriegner said.

The Marwar Mundwa Greenfield integrated plant, at a total investment of Rs. 2350 crores, will commence operations by Q3 2021 and this will be a green plant with a Waste Heat Recovery system and other renewable energy installations.

Ambuja is also evaluating brownfield expansions in Bhatapara and Maratha plants. It is also looking at significant debottlenecking opportunities across all plants.

Ambuja Cement and its main subsidiary ACC have now come together to create more shareholder value, Kriegner said.

ACC completed and commissioned the new grinding unit at Sindri in the state of Jharkhand. The new facility will add 1.4 MTPA of cement capacity to its existing 3 MTPA at this site.

“With cement demand projected to rise significantly in India, several further development capacity expansion projects were kick-started to increase clinker and cement capacities,” Kriegner said.

Both ACC and Ambuja Cement form part of the French-Swiss company LafargeHolcim.

Kriegner said that the cost management and efficiency initiatives have helped the company deliver a strong performance.

“We fully leveraged synergies between LafargeHolcim India’s two operating companies – Ambuja Cement and ACC to drive scale and performance,” he said.

Ambuja’s synergies under the Master Supply Agreement with ACC led to more than a 5% contribution to the Profit Before Tax of 2020, the chairman said.

Ambuja generated Rs. 2,606 crores of cash from operations supported by 16 days reduction in net working capital cycle. “We have a robust balance sheet with zero debt and AAA rating from Crisil,” Kriegner said.

Ambuja’s Operating EBITDA grew by 23% to Rs. 2,647 crores and Net Profit grew by 17% to Rs. 1,790 crores in 2020

ACC’s operating Ebitda grew by 3% to Rs. 2,484 crores and Profit After Tax grew by 4% to Rs.1,430 crores.

“ACC has also benefited from the Master Supply Agreement to an extent of around 5% of profit before tax, Kriegner said.

Ambuja’s Board declared an interim dividend of Rs.17 per share and is recommending a final dividend of Rs.1 per share. Thus, the aggregate dividend for the year 2020 is Rs.18 per share and the total payout will be Rs. 3,574.16 crores.

“The initiatives undertaken by the Government will help the resurgence of rural demand and infrastructure projects including affordable housing,” Kriegner said.