Ambuja Cements to invest Rs 802 cr on expansion this year

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Ambuja Cements, in which Swiss building materials major Holcim has a majority stake, will invest Rs 802 crore this year from internal accruals to part- finance the ongoing capacity expansion projects.

"The year 2014 will see capital expenditure worth Rs 802 crore over and above Rs 725 crore investment made in 2013. The entire proposed expenditure will be financed by internal accruals," Ambuja Cements said in its annual report.

The company, which has 27.25 million tonnes per annum (mtpa) capacity, is setting up three greenfield plants of 1.5 mtpa capacity each in Rajsthan, Madhya Pradesh and Uttar Pradesh. It is also adding clinker capacity in West Bengal and Rajasthan by 0.8 mtpa each.

Ambuja Cements is investing Rs 3,500 crore for setting up the 3 new plants. The expansion at Sankrail project is underway and is slated to cost Rs 325 crore.

"So far, equipment orders have been placed and civil work is in progress. This project would add 0.80 mtpa grinding capacity to the unit along with other facilities," it said.

A new expansion project to set up a roller press at a cost of Rs 70 crore at Rabriyawas unit in Rajasthan is also coming up. This will add 0.80 mtpa grinding capacity in the first half of 2014, Ambuja cements said.

The company said however that the cement industry is looking for an up-cycle backed by an increase in rural consumption and recovery in infrastructure activity after a muted growth for the last three years.

India's cement consumption growth halved to 4 per cent between 2011 and 2013, from 8 per cent logged between between 2008 and 2010.

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