Confident that India’s long-term growth potential remains intact despite the Covid setback,” Birla said.
Kumar Mangalam Birla, chairman of Grasim Industries, said on Monday that the company’s capex plan for the financial year 2020-2021 has been calibrated to Rs 1,615 crore while the company has decided to continue the Vilayat VSF (viscose staple fibre) brownfield expansion with revised timelines.
Addressing the shareholders at the company’s 73rd annual general meeting, Birla said across the businesses, Grasim’s fixed costs have reduced by 35% in Q1, which amounts to savings of Rs 256 crore compared to the FY20 quarterly average.
Commenting on India’s economy, he said that contraction in GDP during the first quarter of FY21 was expected. “Despite Q1 GDP slump, activity levels are normalising. Confident that India’s long-term growth potential remains intact despite the Covid setback,” Birla said.
With the restart of operations post-lockdown, Birla said Grasim was able to swiftly improve capacity utilisation in most of the major plants to over 75% within the June quarter. “Both the VSF and chemicals businesses are now operating at about 80% of pre-Covid capacity. We expect to be back to pre-Covid capacity by Q4,” he said.
Meanwhile, pulp and fibre business forayed into antimicrobial fibre. The fabric produced using the special fibre inherently possesses antimicrobial properties, he said.
Also, the chemicals business witnessed an upsurge in the demand for chlorine value-added products driven by disinfectants and hygiene-related products, he added.