UltraTech Cement lines up Rs 1.8K crore capex for cables biz foray

Over the past few years, Aditya Birla Group has also adopted a closer-to-the-end-consumer approach, with an expanded presence in jewellery, fashion retail, real estate, and paints

India’s largest cement maker UltraTech Cement on Tuesday announced plans to enter the wires and cables business, with an initial capital expenditure (capex) of ₹1,800 crore to be spent over two years.

 

The company said it aims to start operations in this segment by December 2026, with a production unit in Bharuch, Gujarat.

 

The cement maker termed the diversification decision as an extension of footprint in the construction value chain.

 

Kumar Mangalam Birla, chairman, Aditya Birla Group, said, “We intend to expand our presence in the construction value chain through our foray in the cables and wires segment, which aligns with our vision of providing comprehensive solutions to our end customers in the construction sector.”

 

 

He added, “Obviously, we will continue to focus and grow our core cement business.”

 

On Tuesday, UltraTech said its board has approved the plan to enter this segment, through its building products division.

 

This is “in line with the company’s strategy to strengthen its position as a comprehensive building solutions provider.”

 

The company said it will leverage its extensive manufacturing expertise coupled with its connect with end-customers to deliver high-quality wires and cables.

 

Through UltraTech’s cement, Hindalco Industries’ aluminium and copper, and Grasim’s entry into paints last year, the group already covers a larger part of the construction value chain.

 

Hindalco’s metal production is also a key raw material in the making of wires and cables.

 

Over the past few years, Aditya Birla Group has also adopted a closer to the end-consumer approach, with expanded presence in jewellery, fashion retail, real estate and paints.

 

With this new entry, UltraTech aims to meet demand across various sectors, including residential, commercial, infrastructure and industrial applications.

 

It noted that the wires and cables industry has witnessed revenue compound annual growth rate (CAGR) of around 13 per cent between FY19 and FY24.

 

The company did not disclose whether it aims for market leadership in this business.

 

KM Birla, on several occasions in the past, has said that the group strategy has been to aim for the top-2 market positions in the businesses it operates.

 

“With migration from the unorganised to the organised market, the outlook continues to remain robust, which provides an attractive opportunity for a new trusted player in the sector,” said UltraTech.

 

In the cement business, UltraTech remains the largest cement maker with more than 175 million tonnes per annum capacity, achieved through a mix of expansions and acquisitions.

 

A similar approach in the wires and cables business may intensify competition for existing players. Polycab India is currently the largest manufacturer of wires and cables in India.

 

Scheme of arrangement with Kesoram from March 1

 

UltraTech Cement, in a notification to the BSE, said its board on Tuesday declared the scheme of arrangement with Kesoram Industries to be effective from March 1.

 

The company will issue one fully paid-up equity share of UltraTech Cement for every 52 fully paid-up equity shares held in Kesoram Industries as on record date. The record date is to be announced by Kesoram.