Input cost and fall in demand of cement worries Birla Corp

The spiralling price rise of input cost and lack of demand of cement which is the maximum revenue generator for Birla Corporation, is putting pressure on the margins of the company.

“The profitability of the company was affected because of pressure on prices and also because of the rising coal and fuel costs and other inputs. Significant increase in capacities in the industry and poor demand from institutional buyers, including the government, compounded the situation,” said Harsh V Lodha, Chairman of Birla Corporation, the flagship company of the M P Birla Group.

However, the company is set to increase the capacity to 9.30 million tonnne. This capacity expansion will include 1.20 million tons proposed capacity increase at Chanderia plant in Rajasthan and the 0.60 million tons proposed increase in Durgapur facility of West Bengal.

The company has also applied to the Ministry of Environment and Forests at New Delhi for further increase in the capacity at Chanderia by another 1.5 million tonnne.

This will take the company's total cement capacity to 10.8 million tonne as the capacity at Chanderia will be more than 5 million tonne.