Nuvoco Vistas announces investments and expansion plans; Stock under pressure

10 Feb 2022 , 10:15 AM

Nuvoco Vistas Corp. Ltd., a leading building materials company and the fifth largest cement player, in terms of capacity, in India, announced its investments and expansion plans in-line with its business strategy while remaining committed to prioritize deleveraging. Nuvoco has been working on multiple projects for sustainable growth with an aspiration to diversify its market base and reduce the business risk.

At around 10.19 am, Nuvoco Vistas Corporation Ltd was trading at Rs421.45 per share down by Rs5.75 or 1.35% from its previous closing of Rs427.20 per share on the BSE.

Comprehensive planning and execution to augment cement volumes availability by approx. 2.4 MTPA
The ongoing debottlenecking projects to increase the clinker capacity at Risda and Nimbol Cement Plants are on track. Furthermore, the Blending Unit at Bhiwani, Haryana will be upgraded to a Grinding Unit to leverage on the successful launch of the Double Bull cement brand in North and the Company’s existing channel in the region. This will provide key impetus to serve high-growth North India markets. The prevailing infrastructure at site will help to expediate the commissioning of the projects with limited capex. The debottlenecking and upgradation projects will augment the collective volume availability by approx. 2.4 MTPA and involve a total capex of approx. Rs400cr.

Alternate fuel projects to demonstrate Company’s commitment towards sustainability
The Company is setting up alternate fuel material handling facilities at Risda and Nimbol Cement plants to further its sustainability goals. The sustenance capex involved in the said projects is tuned to ~ Rs50cr.

Greenfield expansion at Gulbarga
As an integral part of growth strategy, the Company will venture in a Greenfield expansion of 6,000 TPD clinker capacity at Gulbarga in Phase – I with the architecture for higher capacity. The Company already has operational limestone mine at the site. The new facility will help expand Company’s footprints in the Western and Central India markets. The capex for Phase-I of the project is ~ Rs1,500cr. The ground-breaking for the expansion project is set in FY23.

Hiren Patel, Chairman, Nuvoco Vistas said, “The recent budget has reemphasized India’s growth story with a focus on infrastructure as a key enabler. Projects like Gati Shakti will lend much-needed power, speed and efficiency to mega infrastructure projects launching India on the path to economic success. India has also been onan affordable housing mission. Cement is an integral part of the infrastructure and housing sector.

The proposed expansion plans at Nuvoco will significantly contribute towards our Prime Minister’s vision of sustainable and inclusive growth. The recent investments are a testimony of our commitment towards Nuvoco’s vision of being a safer, smarter and sustainable building material company.”

Jayakumar Krishnaswamy, Managing Director, Nuvoco Vistas added, “With cement demand in India estimated to grow at a CAGR of 6-7% by FY26, we are well-placed for a growth trajectory in long run. Our investment towards alternate fuel material handling facilities is a testament to our untiring commitment towards a sustainable future. Our current growth investments will help us seize the opportunities predominantly in the northern and western parts of the country, while further strengthening our leadership position in the east.”