Gautam Adani-led Adani group, which owns Ambuja Cements and ACC Ltd, aims to capture about a fifth of the Indian cement market by FY28. Adani Cement business will implement its accelerated capex program through internal charges and the business will continue to “remain debt free”, said an investor presentation shared by Ambuja Cements.
In addition, Adani Cement is also stepping up the pace of capacity expansion and is expected to have an accelerated growth of 16 percent to reach 140 MTPA (million tonnes per annum) by FY2028. “Adani Cement market share targeted to be 20 percent by FY’28 from current 14 percent,” the Adani group company said.
Currently, Adani Cement is the second leading company in the sector after the Aditya Birla group company UltraTech Cements. Ambuja, with its subsidiaries ACC Ltd, has the capacity to produce 77.4 million tonnes of cement annually from 18 integrated cement manufacturing plants and 18 cement grinding units across the country. It recently acquired Sanghi Industries Ltd.
The group has certain enablers for capacity improvement and it already has land in possession and some are in the advanced stages of acquisition. It has a cumulative 8,000 million tonnes of limestone reserve, an important raw material for the cement industry, “in possession at zero to nominal premium”, Adani Cements said.
Moreover, it has 40 percent of Fly Ash requirements under the long-term arrangement, which will increase to more than 50 percent by 2028. Ambuja further stated that it has “better enterprise risk management” and 65 percent of the total cost of cement. has synergies with a group or where the Group is the market leader.
“Accelerated Growth and Cost Leadership supported by Group Synergies is one of the most important differentiating points for Adani Cement,” it said. Apart from that Ambuja continues to remain debt free with a net worth of ₹43,000 crore (about $5.2 billion), and cash and cash equivalents of ₹8,591 crore ($1.04 billion) in December 2023.
Over the Indian cement industry, Adani Group said it also expects to grow at a CAGR of 7 to 8 percent, it said. “Growth will be further compounded by the opportunities in the Construction Industry,” it said. India is currently the second largest producer of cement with an installed capacity of 550 million tons, having eight percent of the total global capacity of 6,875 million tons.
“Next 5 years, demand expected to grow at a rate of 8 – 9 percent, higher than capacity addition rate, expect better capacity utilization,” it said. In September 2022, Adani Group acquired a controlling stake in Ambuja Cement from a Swiss company. Holcim for cash proceeds of $6.4 billion (approx ₹51,000 crore).
Unlock a world of Perks! From insightful newsletters to real-time stock tracking, breaking news and a personalized news feed – it’s all here, just a click away! Login Now!
Catch all Business News, Market News, News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More or less
Published: 12 Apr 2024, 19:53 IST