Birla Corp plans expansion, eyes 25 million tonnes capacity by FY26

Birla Corporation's consolidated capacity stands at around 20 mt after commissioning of the 3.9 mt greenfield plant at Mukutban in Maharashtra at the beginning of FY23

M P Birla group flagship, Birla Corporation, is chalking out plans for the next wave of expansion that will take its capacity to 25 million tonnes (mt).

Addressing shareholders at the company's annual general meeting, Harsh V Lodha, chairman of Birla Corporation, said that 2022-23 created the platform for the next phase of growth for the company. "The current year will be one of consolidation."

"It is our firm conviction that the India growth story is now unstoppable and your company is well placed to be part of the journey," he added.

Birla Corporation's consolidated capacity stands at around 20 mt after the commissioning of the 3.9 mt greenfield plant at Mukutban in Maharashtra by subsidiary, RCCPL, at the beginning of FY23.

The expansion to 25 mt is expected by 2025-26. Elaborating on the roadmap, Sandip Ghose, managing director and chief executive officer of Birla Corporation, said the expansion would essentially come from debottlenecking, a second line at Maihar (Madhya Pradesh) and grinding units. "The options are yet to be frozen," he said, speaking to the media after the AGM.

By 2030, the target is to take the capacity to 30 mt. And the company is not ruling out inorganic options for the capacity increase from 25 to 30 mt. "If a great opportunity comes our way, we will look at it," he said, adding that the company was not going to be adventurous.

Lodha added that the company did look at inorganic options for shoring up (raw material) reserves. In the first quarter, it acquired a limestone mine.

As part of the ongoing expansion, the Mukutban facility is in the ramp-up phase. It was able to cross a production run rate of 1 lakh tonnes per month by January 2023 and turned Ebitda-positive in March 2023. "We consider this a decent performance for a new entrant in a market with well-entrenched competition from leading national brands," Lodha told shareholders. By the exit of FY24, the run rate is expected to be 2 lakh tonnes per month.

Mukutban marked the company's entry into Maharashtra, a mature market with leading national players. However, the company believes that there is room for another quality player. "We have a popular brand in the value segment, but our main thrust is on the premium brand, Perfect Plus, which is the flagship national brand," Ghose said.

"We are not price warriors, we are price takers and will be operating at the premium end of the market mostly," he added.

The company also plans to accelerate its play in the value-added building materials of construction chemicals and wall putty. It has also started a pilot project in ready mix concrete with its first plant in Lucknow, Uttar Pradesh. "The initial results are encouraging and we are evaluating next steps," Lodha told shareholders.