In a major stride towards expanding its footprint in India’s cement and building material sector, Ambuja Cements Ltd (ACL), a key player in the Adani Group, announced the culmination of its acquisition of Sanghi Industries Ltd (SIL). This strategic move, valued at an enterprise value of Rs 5,185 crore, not only signifies a significant milestone in Ambuja Cement’s growth journey but also underscores the Adani Group’s unwavering commitment to India’s housing and infrastructure development.
Funded entirely through internal accruals, ACL now holds a controlling stake of 54.51 per cent in SIL, setting the stage for leveraging operational synergies to enhance efficiency, reduce costs, and ensure a sustainable approach to cement production.
SIL’s crown jewel, the Sanghipuram integrated manufacturing unit, spanning a vast 2,700 hectare, stands as India’s largest single-location cement and clinker production facility. With a clinker production capacity of 6.6 MTPA and a cement grinding unit of 6.1 MTPA, this facility, equipped with a dedicated 13 MW captive power plant and an efficient 13 MW Waste Heat Recovery System, is seamlessly connected to a captive jetty in Sanghipuram.
The acquisition strategically positions ACL to accelerate its unique coastal strategy, aiming to boost cement capacity to 15 MTPA along the West Coast, capitalizing on SIL’s low-cost clinker. This initiative will harness the strengths of Ambuja and ACC brands, coupled with Adani Group’s expertise in ports and shipping, and the cost advantage of the Sanghipuram unit.
Ajay Kapur, CEO, Cement Business, expressed his enthusiasm, stating, “This acquisition represents a significant step forward in our journey solidifying Adani Group’s leadership position in India’s cement industry. We welcome the employees of Sanghi Industries into the Adani family and look forward to capitalizing on the synergies this acquisition offers.”
SIL’s Sanghipuram unit not only provides an immediate opportunity for low-cost debottlenecking but also opens avenues for green power generation, reaching up to 45 per cent. Plans are in place to increase clinker capacity by 0.5 MTPA and cement capacity by 1.5 MTPA. The unit’s multifuel flexibility, incorporating an additional 12 MW WHRS and 30 MW of Solar/Wind power, positions Sanghipuram as the largest single-location clinker complex and consistently one of the lowest-cost producers.
Recognizing the Adani Group’s prowess in marine infrastructure, expansion plans for the Sanghipuram port are underway to handle larger vessels, facilitating cost-effective transportation of clinker and cement via sea routes. This strategic move aligns seamlessly with the Adani Group’s commitment to environmental sustainability.
Kapur emphasized, “We are now better positioned to cater to diverse customer needs, offering a broader product range and innovative solutions for various construction requirements. The cost and geographic advantages of the 15 million tons coastal strategy will significantly strengthen the bottom line of ACL.”
In conclusion, he assured, “The Company will continue to invest in cutting-edge technologies and best practices to ensure the highest quality standards and environmental stewardship.”