Dalmia Cement (Bharat) Limited has expanded its capacity in Bengal by 2.3 million tonnes at an investment of Rs 360 crore, taking the total capacity of the cement major in the state to 4 million tonnes per annum (mtpa) and pushing the total investment to around Rs 600 crore.

The expansion comes amid expectations of revival in demand following business disruption because of Covid. Demand for cement, including pent up demand, is anticipated from infrastructure projects and affordable housing.

The expansion in Bengal would be followed by brownfield capacity addition of 2.3mtpa in Odisha. The cement maker also plans to revamp operations of Murli Industries with 3 mtpa capacity in Maharashtra.

“Today we are at around 29 mt approximately and we should be going to 31 mt by the first quarter of the next financial year and by the third quarter we should be around 34mt,” said Ujjwal Batria, COO, Dalmia Cement (Bharat) Limited.

He added that the company plans to produce blended cement to ensure reduced carbon footprint as part of its plans to become carbon negative by 2040.

Demand for cement has been gradually improving in the third quarter.

“The pandemic had a big impact on the first quarter and there was low demand. But we have seen growth coming back in the third quarter. But even with this, growth for the year will be at around 3-5 per cent is what we anticipate today. We will also have the benefit of pent up demand. Lot of focus on infrastructure and low cost housing projects and this gives us hope that going forward demand will look up,” he said.

Indrajit Chatterji, executive director and head — sales and marketing (east) — said demand for cement has improved in the east in the last couple months.

“The biggest advantage of this addition would be the supply commitment of around 8-12 hours by road. This will enable the channel partners to get the product well on time,” said Chatterji.

Market analysts are also bullish about the demand scenario.

“Buoyant demand scenario combined with support from offtake in government infrastructure projects provided a filip to the industry with current revised expectations of flattish growth for FY21,” said Kunal Shah, analyst, institutional equities, Yes Securities.

But pricing in the eastern market is expected to remain under pressure on account of capacity addition, Shah said.