15 Feb 2018
Grasim earmarks over Rs.3,500 crore to boost VSF output
Capacity to rise by 58%
MUMBAI: Aditya Birla Group-owned Grasim Industries, which has businesses as diverse as telecom, cement, and textiles, would spend more than Rs.3,500 crore on expanding the output of viscose staple fibre (VSF) that finds key use in making textiles.
"The board has approved a brownfield expansion of Rs.3,523 crore at the Vilayat facility which will get commissioned by 2021," said Dilip Gaur, managing director of Grasim Industries.
Coupled with the existing expansion and debottlenecking plan of Rs.802 crore, the total capacity for VSF will be increased by 58% to 788 KTPA from the current 498 KTPA, he said.
Grasim is the only producer of the fibre in the country. The company already has expansion projects worth Rs.2,900 crore in process for both its VSF and chemicals businesses, taking the total spends on expanding capacities to more than Rs.6,400 crore. The money will be spent over the next two and a half years.
"We have a strong balance sheet," said Sushil Agarwal, group CFO of Grasim Industries. It is sitting on free cash worth Rs.600 crore on a standalone level, after its capex of over Rs.700 crore during the nine months ending December. On a consolidated level, net debt for the company is Rs.14,464 crore, caused mainly by UltraTech’s acquisition of Jaypee Cements assets last year.
Grasim Industries that also produces chemicals like caustic soda, which is used in the production of aluminium as well as textile, reported its earnings for the quarter ended December 2017. On a standalone basis, the company reported a 43% increase in net profit on a yearly basis at Rs.474 crore. Consolidated net profit for the company that houses group companies Idea Cellular and UltraTech Cement fell by 17% at Rs.786 crore.
Standalone net revenue for the company grew by 75% at Rs.4,428 crore on the back of higher volumes from both its VSF as well as chemicals business while consolidated net revenue grew by 60% at Rs.15,291 crore.
EBITDA on a standalone basis grew by 54% at Rs.920 crore. On a consolidated level, EBITDA grew by 44% at Rs.2,696 crore.
43% INCREASE IN CO’S STANDALONE PROFIT