Birla Corp (BCL), the flagship company of the M. P. Birla Group, plans a capital expenditure of Rs.950 crore for setting up units in Bihar, Jharkhand and Madhya Pradesh.

The company board has already approved this plan, the company said in a statement. The grinding/blending units will have an aggregate capacity of 4.5 million tonnes.

BCL ended the quarter ended September 30, 2013, with a nearly 50 per cent drop in its post-tax profit which stood at Rs.41.60 crore against Rs.80.20 crores in the same period a year ago. Net income from operations stood at Rs.710.7 crore against Rs.627.44 crore. The despatch of cement, at 18.52 lakh tonnes, was 17.3 per cent higher than a year ago.

Harsh V Lodha, Chairman, attributed lower profits to severe drop in realisation, subdued demand, rise in operational costs, and suspension of captive mining operations at Chanderia plants.

Mining, banned since August 2011 by the High Court at Jodhpur, has since been allowed by the Supreme Court, which ordered use of heavy earth-moving equipment instead of normal blasting. The extraction of limestone from mines, which was hitherto suspended, has since commenced.  The unit still procures limestone from the market to utilise its plant capacity.

The cement business environment continued to be dull because of low demand, especially in housing and infrastructure sectors.

An extended monsoon affected construction activities, leading to slackness in demand. Rupee depreciation against the U.S. dollar has offset the declining coal import costs. Increase in freight costs owing to frequent increase in diesel prices and railway freight affected margins.

The company said that it was planning fresh investments in view of the market potential and the proximity of the chosen sites to fly-ash sources and the availability of tax incentives.

The projects are also expected to reduce logistic costs, improve quality, and increase competitiveness.

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