It is a well-known fact that most companies want to expand their interests and make more investments. But it is even better if these interests are expanded internationally to make better physical investments and purchases in a different country. This business procedure or investment can be carried out through greenfield expansion.

Greenfield expansion, as the term literally signifies, is the construction of buildings on fields that were previously green. Other than that, the word green also signifies the word new, which in this case refers to new construction projects and buildings by companies.

A greenfield investment or expansion refers to a parent company opening a subsidiary in a different country. Unlike brownfield expansions, this form of expansion does not include purchasing an already existing facility. Instead, it is the beginning of a new venture by constructing new facilities in the host country. The construction projects can also include more than just a production facility and can include offices, accommodations as well as distribution centers.

The key takeaway from this form of investment or market entry is primarily used when a company wants to achieve the maximum amount of control over its foreign activities.
Which other companies have made numerous greenfield investments worldwide?

• ➔Coco-Cola
• ➔Starbucks
• ➔McDonald’s
• ➔Toyota Motor Corp. in Mexico

What are some of the benefits the cement factory ( industry) can gain from greenfield expansion?

• ➔One can achieve high levels of control over all aspects of business operations
• ➔Besides that, one can also gain a high level of quality control over the manufacturing and sale of products and services
• ➔Maximum control over brand image and staffing can be exercised
• ➔Higher achievement in terms of economies of scale and scope in production, marketing, finance, research, development, transportation and purchasing
• ➔One can create jobs for the economy where the greenfield expansion is taking place
• ➔One can also implement the best long-term strategy
• ➔Commitment to the market will be more well-grounded
• ➔The possibility to work with relevant authorities from the beginning is also present
• ➔One has complete control over the brand
• ➔One has complete control over the staff
• ➔Higher press opportunities are there
• ➔Based on an environmental context, the land on which the facility sits ➔will not be contaminated from the previous owner’s activities.
• ➔Higher chances to increase and enhance the plant with greenfield, however the owner wishes to do so.

Keeping these benefits in mind,MP Birla Cement has decided to set up a 4 million tonnes per annum greenfield integrated cement plantat Mukutban in Maharashtra. It is expected to be commissioned in 2021-2022. The Mukutban project includes the construction of a 40 MW captive power plant along with a power generation facility of 10.6 MW which uses a waste heat recovery system.

Located in a strategic locale in the Yewatmal district, the Mukutban project will be one of the largest cement plants in the cluster. It will hold a production capacity of 4 million tonnes per annum. This project is also extremely important as MP Birla Cement previously had markets that were operating from the Vidarbha region. Now with the opening of the Mukutban project, the company can expand its markets to include the entire region of Maharashtra and Telangana. This plant is also technically superior to our other plants as it will be one of the latest plants of the cluster with a robotic lab. With the Mukutban plant, we will provide better consistency and best-quality cement. This expansion is set to increase our brand portfolio and will surely add value to the MP Birla Cement’s name.