Nuvoco to set up 2 MTPA grinding unit in Kutch; adds ₹300 cr to Vadraj Cement capex
Nuvoco Expands: ₹1,500 Crore Investment in Kutch Grinding Unit and Vadraj Cement Assets
Nuvoco Vistas Corporation Ltd, the cement arm of Gujarat-based Nirma Ltd, announces a significant expansion of its operations with a new 2 MTPA grinding unit in Kutch and additional investment in recently acquired Vadraj Cement assets, marking a strategic move to strengthen its presence in the Gujarat market.
Investment Overview and Expansion Plans
- Total investment increased from ₹1,200 crore to ₹1,500 crore
- New 2 MTPA grinding unit planned in Kutch
- Project completion targeted by December 2027
- Total cement production capacity to reach 31 MTPA
Phased Investment Strategy
| Year | Investment Amount | Phase |
|---|---|---|
| 2025 | ₹600 crore | Phase 1 |
| 2026 | ₹600 crore | Phase 2 |
| 2027 | ₹300 crore | Phase 3 |
Vadraj Cement Acquisition Details
Acquired Assets Include:
- 3.5 MTPA clinker unit in Kutch
- 6 MTPA grinding unit in Surat
- High-quality limestone reserves
- Captive jetty in Kutch
Financial Strategy
Funding Structure:
- ₹600 crore through long-term debt
- ₹1,200 crore through CCPS and CCDs
- Bridge loan of ₹1,200 crore for six months
- Current net debt reduced to ₹3,640 crore in FY25
Market Impact and Strategic Benefits
The expansion will significantly enhance Nuvoco’s presence in Gujarat and northern Maharashtra markets. The company currently sells one million tonnes of cement in Gujarat, sourced from Rajasthan facilities. The new setup will not only serve local markets but also free up Rajasthan capacities for northern market expansion.
Debt Management Strategy
Nuvoco has demonstrated strong debt management capabilities, reducing net debt from ₹6,730 crore in FY21 to ₹3,640 crore in FY25. The company aims to maintain a comfortable operating debt level of ₹3,500-4,000 crore while executing this expansion plan.
This strategic expansion positions Nuvoco Vistas Corporation for significant growth in the western India cement market, with enhanced production capabilities and optimized distribution networks. The investment reflects the company’s commitment to meeting growing cement demand while maintaining financial prudence.
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