Adani Group to become most profitable cement manufacturer after Ambuja, ACC acquisition

To mark completion of the acquisition on September 17, the Adani Group founder said the ports-to-energy conglomerate has in a single stroke become the second largest cement manufacturer in the country

Days after completing a $6.5 billion acquisition of Ambuja Cements and ACC, billionaire Gautam Adani said his group has planned to double cement manufacturing capacity and become the most profitable manufacturer in the country.

He saw a multifold rise in cement demand in India on the back of record-breaking economic growth and the government’s infrastructure creation push, which will give significant margin expansion.

In a speech made at an event to mark the completion of the acquisition on September 17, the Adani Group founder and chairman said the ports-to-energy conglomerate has in a single stroke become the second largest cement manufacturer in the country.

Adani Group last week completed buyout of Swiss major Holcim’s stake in the two firms.

Calling the acquisition historic, he said this buyout is India’s largest ever inbound M&A transaction in the infrastructure and materials space and closed in a record time of 4 months.

“Our entry into this business is happening at a time when India is on the cusp of one of the greatest economic surges seen in the modern world,” he said in the speech, which was released on September 19.

Stating reasons for the foray into the cement space, he said while India is the second largest producer of cement in the world, its per capita consumption is just 250 kg compared to 1,600 kg of China. “This is almost a 7x headroom for growth.” Also, “as several of the government’s programmes gather momentum, the long-term average growth in cement demand is expected to be 1.2 to 1.5 times the GDP. We anticipate growing at twice this number,” he said.