By Bl Kolkata Bureau

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Birla Corporation is looking to moving up the building material value chain even as it is focussing on consolidating its core cement business.

The MP Birla Group flagship, one of India’s largest cement makers, expects cement demand in the country to grow at CAGR of 6-7 per cent over the next few years.

As the Goods and Services Tax (GST) Council has slashed the rate on cement and also rationalised taxes on other building materials, the move is expected to boost demands for housing, said Birla Corporation Chairman Harsh V Lodha during the company’s 105th Annual General Meeting on Monday.

“It isn’t immediately clear to what extent the GST cut will improve the profitability of cement manufacturers, but it will certainly shore up demand for real estate and, therefore, boost cement prices as well across regions,” said Lodha.

FY25 was a year of unprecedented pricing pressure, he said, adding cement prices fell 11 per cent in the first eight months, and even the recovery towards the end of the year was modest. “Despite unfavourable market conditions, the company’s cement division maintained a capacity utilisation of 91 per cent and registered sales growth of 2.5 per cent by volume,” he said.

Plans investment

In May this year, the boards of Birla Corporation and its wholly-owned subsidiary, RCCPL, approved an investment of ₹4,335 crore to scale up the consolidated production capacity from 20 million tonnes to 27.6 million tonnes by 2028-29.

RCCPL is planning to invest ₹2,300 crore to expand the clinker production capacity of its Maihar unit in Madhya Pradesh, which in turn, will feed three new grinding units, to be set up at Prayagraj, Gaya and Aligarh. “We have budgeted for an investment of a little over ₹2,035 crore for these new units,” said the Chairman.

The proposed consolidated production capacity increase will give the company greater access to Bihar, Maharashtra, and some of its core markets in North and Central India.

The company witnessed a significant growth in its sales in the east and west during the first quarter this fiscal as it continued to maintain high capacity utilisation. Sales by volume grew 9 per cent year-on-year during the period.

“We are a new entrant in the west but we are making rapid progress. Our sales in the east grew 18 per cent, followed closely by the west, where our sales went up 15 per cent. In our traditional markets in the central and northern regions, our sales grew 7-8 per cent,” Lodha added.

“In its core markets, the company would be focussing on retaining its value share. It is also focussing on moving up the value chain with the brand extensions in the areas of readymix concrete and construction chemicals by leveraging its premium positioning in those markets,” said Birla Corporation MD & CEO Sandip Ghose.

As a brand extension to move up the value chain in line with new construction trends, the cement maker is looking to grow its readymix concrete business.

Published on September 15, 2025