Birla Corporation plans future growth on pillars of cement business

Birla Corporation is charting its future growth strategy relying on its past acquisition of Reliance Infrastructure’s cement business, which not only gave it a national cement brand — where it was lagging the most — but also opportunities to scale up the business to reach 20 million tonnes in the following two and a half years. 

Amidst immense controversy over feasibility of a takeover and opposition from some of its minority shareholders, Birla Corp acquired Reliance Cements Company (RCC), the cement arm of Reliance Infrastructure, in August 2016 for Rs 48 billion. 

The acquisition boosted Birla Corp’s installed capacity by 5.58 million tonnes per annum (mtpa) to reach around 15.5 mtpa. The Perfect brand of cement, originally owned by RCC, also came in as part of the deal. 

Now, Birla Corp has taken this brand of premium cement that was hitherto confined to central India (namely Madhya Pradesh), to all markets where it operates.  

Asked if the RCC acquisition will drive the company’s growth, Harsh V Lodha, chairman of Birla Corp, said, “Yes, the acquisition, apart from its plants and a brand, also comes with limestone reserves. What needs to be seen is how much of it can we extract.” He was speaking to Business Standard after the company’s 98th Annual General Meeting. 

Besides obtaining permits to various mining leases in Madhya Pradesh, Karnataka, Maharashtra and others, the acquisition has paved the way for Birla Corp to set-up a greenfield project in Maharashtra. Previously, the RCC had planned its second plant in Wani in Maharashtra, which would have a 4.5 mtpa capacity.