Displaying items by tag: Capacity

Brazil: Votorantim Cimentos plans to invest US$1bn in expanding its Brazilian operations in the period up to the end of 2028. US$304m-worth of the investments are already underway at the start of 2024. Reuters has reported that the investments include cement plant projects to raise Votorantim Cimentos’ Brazilian cement production capacity by 8.8% to 37Mt/yr. These include a US$162m investment in a 20% capacity expansion to its Votorantim cement plant and a US$60.8m, 1Mt/yr expansion to its Salto de Pirapora plant. Further aims are to ensure structural competitiveness, raise energy efficiency and digitise operations, including applying artificial intelligence (AI) to freight. The producer expects its earnings before interest, taxation, depreciation, and amortization (EBITDA) to eventually rise by US$263/yr between 2023 and 2028 as a result.

India: Wonder Cement says that it has completed the construction of its new Tulsigam grinding plant in Gujarat. The Economic Times newspaper has reported that the new grinding plant will integrate with Wonder Cement’s existing facilities, including the Nimbahera cement plant in Rajasthan, and grinding plants in Haryana, Madhya Pradesh, Maharashtra and Uttar Pradesh.

The Tulsigam grinding plant will raise Wonder Cement’s capacity to 18Mt/yr, following the expansion of the Nimbahera cement plant to 11Mt/yr and the inauguration of the new Aligarh grinding plant in 2023.

Wonder Cement director Vivek Patni said "Each strategic move, including our new Tulsigam grinding unit, is aligned with our commitment to cater to India’s evolving infrastructural demands. We're poised for continued growth and are deeply committed to quality, innovation and societal impact."

India: Shree Cement inaugurated its new 4.2Mt/yr Nawalgarh cement plant in Rajasthan on 14 December 2023. The plant boasts an 11,500t/day kiln, which is among the largest in India, according to the company. Following the inauguration, Shree Cement’s installed production capacity now stands at 53.4Mt/yr.

Managing director Neeraj Akhoury said “In our pursuit to become an 80Mt/yr company by 2028, we are excited to announce commissioning the kiln in our new integrated facility at Nawalgarh, Rajasthan. This facility is well suited to cater to the high consumption cement markets of National Capital Region, Punjab and Haryana, besides strengthening the company’s customer servicing capability in Rajasthan.”

China/India: Research organisation Fitch Ratings has forecast continued ‘steady’ growth of 6 – 8% year-on-year in cement demand in India in 2024. Meanwhile, it expects demand in China to remain ‘weak,’ amid low activity levels in the residential construction sector. Nonetheless, Fitch Ratings said that rising installed cement capacity will limit growth in producers’ profit margins in India, while producers’ profit margins will stabilise in China.

US: Mexico-based GCC has hired ThyssenKrupp Polysius North America to build a 3000t/day clinker production line at its Odessa plant in Texas. When commissioned in late 2025, the line is expected to more than double the plant’s clinker capacity to 2Mt/yr across three kilns. The supplier says the project will also lower the plant’s annual CO₂ emissions by 13%.

GCC chief executive officer Enrique Escalante said "We remain strongly committed to delivering strong stakeholder value, while investing in the future growth of our business. With the expansion of the Odessa plant, we will ensure GCC is prepared for a new phase of the industry cycle."

India: UltraTech Cement’s acquisition of Kesoram Cement will raise its share of capacity in the Southern Indian cement market to 21% from 11%, according to BusinessLine Online News. Market researcher Emkay Global said that it expects the acquisition and UltraTech Cement’s current expansion plans to raise the group’s total share of cement capacity in Southern India and Western India by 7 – 8%.

Pakistan: Fauji Cement inaugurated its Shadan Lund cement plant in Dera Ghazi Khan on 30 November 2023. The Pakistan Observer newspaper has reported that the plant has a capacity of 2.37Mt/yr and brings Fauji Cement’s capacity to 10.6Mt/yr.

UltraTech Cement approved a US$1.5bn capacity expansion plan this week. The initiative intends to add 21.9Mt/yr in production capacity by setting up four new cement plants, four upgrades and four new terminals. It will also add 39MW in waste heat recovery (WHR) units and alternative fuels feeding and handling investments. Commercial production at the new sites is scheduled to start from the 2026 financial year onwards.

The company is India’s largest cement producer by production capacity and the third biggest globally outside of China. Yet it is still growing as this latest announcement shows. Kumar Mangalam Birla, the chair of parent company Aditya Birla Group, revealed the ambition earlier this year, that UltraTech Cement wants to reach a production capacity of 200Mt/yr in the near future. This is likely to be ordinary Portland cement (OPC) capacity from both integrated and grinding plants. It reported a figure of 132Mt/yr in its annual report for the 2023 financial year. This latest capacity investment is its third in recent years. In December 2020 it announced investment of just below US$560m to add 12.8Mt/yr of capacity with commissioning by around the end of the 2023 financial year. It later confirmed that most of this had been completed on schedule. Then another US$1.55bn investment was ordered in June 2022 to add 22.6Mt/yr. This tranche of new plants and terminals is planned to be completed by the end of the 2025 financial year.

Graph 1: UltraTech Cement’s OPC production capacity and utilisation rate, 2017 - 2023 financial years. Source: Company annual reports.

The graph above shows how the company’s capacity has grown since 2017. This is the year in which it acquired 21Mt/yr of capacity from Jaiprakash Associates for US$2.5bn. These plants then show up in the capacity figure for 2018. The next big bump to capacity arrived in 2019 when UltraTech Cement was able to complete its purchase of Century Textiles & Industries, adding another 15Mt/yr of capacity. Since then though it has mainly been newly built plants or upgrades. It is also worth noting the capacity utilisation figures the company has reported. There has generally been an upward trend since 2017 with a dip during the Covid-19 pandemic years in 2020 and 2021. This has also been happening despite adding more capacity through both acquisitions and building new plants. The other point to note is that the cement company is mostly a wholly India-based one. It has presences in the UAE, Bahrain and Sri Lanka but these are small compared to the operations back home. In the 2023 financial year, 23 of its 24 integrated plants were domestic, 25 out of 29 grinding plants were and seven out of eight terminals were too.

UltraTech Cement’s current nearest rival, Adani Group, appeared on the scene in 2022 when it bought Holcim’s subsidiaries in India. The timing may have been coincidental but, after Holcim agreed to sell to Adani Group in May 2022, UltraTech Cement announced its US$1.55bn capacity drive in June 2022. A year later in June 2023 Adani Group targeted a capacity of 140Mt/yr by 2028. To give an idea of the market both of these companies are competing in, Ratings Agency ICRA’s last forecast in September 2024 predicted that cement volumes would grow by 9 - 10% in the 2024 financial year. Capacity expansion by all cement producers was expected to be driven by “steady demand for housing and increased government investments in infrastructure.”

UltraTech Cement may be the fastest expanding cement company in the world at the moment. India certainly needs the cement as its population overtook China’s in April 2023. The Aditya Birla Group company is not taking any chances with its competitors by maintaining its lead in capacity. One risk it may want to watch out for though is India’s nascent Carbon Credit Trading Scheme. Some form of carbon trading for the petrochemicals, steel, cement and paper sectors looks set to start in the second half of the 2020s. However, any such scheme is likely to favour incumbent manufacturers with newer plants. With the country’s net zero target set at 2070, UltraTech Cement has plenty of room to manoeuvre.

India: UltraTech Cement announced planned new capital expenditure (CAPEX) investments worth US$1.56bn to grow its production capacity, beginning in the 2026 financial year (1 April 2025 – 31 March 2026). The Telegraph newspaper has reported that the growth will expand UltraTech Cement’s capacity by 13% to 187Mt. 33.8Mt-worth of this (18%) will be in its native West India, 40.4Mt-worth (22%) in East India, 36.2Mt-worth (19%) in North India, 35.7Mt-worth (19%) in Central India and 35.5Mt-worth (19%) in Central India, with the remainder situated overseas. The new capacity consists of four new production facilities and four upgrades to existing facilities, supported by four new cement terminals. The producer says that it will come online in a phased manner, up to an unspecified end date.

Kumar Mangalam Birla, chair of parent company Aditya Birla, said "Over the past seven years, UltraTech has strategically invested over US$6bn to support India's rapidly changing infrastructure landscape. Our fresh commitment of US$1.56bn underscores our deep-rooted belief in India's economic potential. With each investment, we have not only expanded our footprint, but also empowered India in meeting its need for housing, roads and other vital infrastructure."

Romania: Holcim Romania has successfully upgraded pyroprocessing and cement grinding equipment at its Câmpulung cement plant in Argeș County. Germany-based KHD Humboldt Wedag supplied equipment for the upgrade. For the plant’s pyroprocessing line, this included a downcomer duct, water injection system and induced draught fan, as well as an upgrade to the clinker cooler. Meanwhile, the grinding line has received a new SKS Z 2500 dynamic separator, cyclones, process ducts and separator fan. The supplier says that the upgrade has increased the Câmpulung plant’s clinker capacity and the efficiency of its operations. The work took 14 months to complete from the signing of the contract in mid-2023.