Birla Corp (BCORP), an Indian cement maker that reported its first profit increase in three years this week, plans to spend Rs 22 billion ($397 million) to add capacity, forecasting demand will revive. The company, based in Kolkata, will increase its capability to make the construction material by 48 per cent to 13.8 million tonne a year by 2015, Executive President G Jayaraman said in Hyderabad.
Birla, which sells 80 per cent of its cement to home builders, will set up three plants to add to its seven factories, he said. Birla, founded in 1919 as a maker of jute products, and larger rivals including Holcim (HOLN) are expanding on optimism lower borrowing costs will rekindle demand from homebuyers after a slowdown propelled unsold apartments to a record in the final quarter of last year. The maker of Samrat and Chetak brands of cement forecasts sales will increase 56 per cent to Rs 40 billion by the year ending March 31, 2016, according to Jayaraman.