Expecting revival of demand for cement, Birla Corp, an Indian cement maker, plans to spend Rs 2,200 crore to add capacity. The company, based in Kolkata, reported its first profit increase in three years this week. It 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 are expanding on optimism that lower borrowing costs will rekindle demand from home buyers after a slowdown propelled unsold apartments to a record in the final quarter of last year.
The Reserve Bank of India (RBI) may cut its policy rate by another quarter point in 2013 after three reductions since January, economists’ forecast. RBI has finally started cutting rates, which will allow young, aspirational buyers to look to invest in real estate, Jayaraman said.