Aditya Birla flagship Grasim Industries will invest up to Rs6,000 crore for expanding cement capacity at its existing plants by 10 million tonnes. The company expects to start expansion work in the fourth quarter of the current financial year, chief financial officer Adesh Gupta said.
The move comes after its recent expansion into the Middle East by acquiring a controlling stake in ETA Star Cement as also the ongoing amalgamation of Samruddhi Cement into Grasim's cement division.
The Grasim board at its meeting today approved the acquisition of ETA Star Cement Company LLC, Dubai, together with its cement operations in United Arab Emirates (UAE), Bahrain and Bangladesh. The acquisition will be carried out by capitalising 'UltraTech Cement Middle East Investments Limited' (UCMEIL), the company's wholly-owned subsidiary in the UAE.
ETA Star Cement's manufacturing facilities include a 2.3 mtpa clinkerisation plant and 2.1 mtpa of cement grinding capacity in the UAE, 0.4 mtpa and 0.5 mtpa of cement grinding capacity in Bahrain and Bangladesh respectively.
UCMEIL will acquire management control and equity stake at all the locations. The enterprise value of these assets works out to around Rs.1,700 crore.
Grasim's cement arm UltraTech Cement today reported a 12 per cent increase in its after-tax profit, at Rs1,093 crore, for the financial year ended 31 March 2010. Cash profit for the year was up 7 per cent at Rs1,589 crore against Rs1,481 crore in the previous year.