Grasim’s Managing Director Dilip Gaur said that, “Viscose is eating out of other fibre markets. Our domestic fibre business has grown by 22 per cent (annually) during the March 2018 quarter,” adding that the bulk of the growth in the textile business is expected to come from the company’s VSF business in the future.On a consolidated basis, Grasim Industries will invest more than Rs. 13, 327 cr in capex into its textile and cement businesses till financial year 2021. The company is expected to concentrate on its viscose staple fibre (VSF) business to register growth and expand its market in India.
Aditya Birla Group’s Chief Financial Officer Sushil Agarwal said that, on a standalone basis, the total capex for Grasim Industries textile business stands at Rs. 6,427 cr, which is to be used by the company till financial year 2021. He also said that, “The board of directors (of the company) today also approved an additional Rs. 1,000 cr investment into the chemical business, taking Grasim Industries’ standalone capex plan (for its textile business) to Rs. 7,427 cr (till FY2021),”and “Cement plants belonging to Jaiprakash Associates were running at 15-20 per cent capacity when we acquired them in June last year,” adding that the Kumar Mangalam Birla-led company has been able to turn around the assets and run them at 75 per cent capacity in less than a year.
Agarwal said that, “On average, Indian cement plants run at 75 per cent capacity. However, UltraTech plants run at over 85 per cent capacity.” He also quoted that, “The aim is to run Jaiprakash Associate’s cement plant at over 85 per cent capacity in future.” Grasim Industries plans to fund almost the capex from its cash flows, but it could look to raise debt if the circumstances require the company to do o. “Grasim Industries, having generated Rs. 3, 500 cr as EBITDA during FY18, has surplus cash on its balance sheet. Our alance sheet also allows us an option to aise up to Rs. 12, 000 cr in debt to grow, in ase of a short-term mismatch,” Agarwal said, adding that the priority of the ompany would be to fund its capital xpenditure from its cash flows.
Meanwhile, the merger of Idea Cellular, he telecom arm of the Aditya Birla Group, ith the Indian arm of global telecom major Vodafone Plc, is expected to be completed oon. Sushil Agarwal said that, “The Idea- odafone merger is on track and should happen soon though it is very difficult to ut a date on it as the final approval is pending with the department of telecommunications,” adding that he is hopeful that the consumption in the country would pick up over the next couple of years.
A senior official of the group said recently that Aditya Birla Group firm Grasim Industries will invest over Rs. 13,000 cr in its textile and cement businesses over the next 24-36 months, as the company looks to increase capacity and modernise production.