The pace of capex (capital expenditure) has increased, which will help Adani Cement "achieve targeted growth ahead of time", said Adani Group Cement Business CEO Ajay Kapur in an investors' call. The Adani group, which had last week announced the acquisition of Orient Cement, aims to have a manufacturing capacity of 140 million tonnes per annum (MTPA) by FY28.
"Adani Cement will benefit from accelerated growth, lower costs and good synergies, all of which will contribute to leading the market and achieving sustainable performance in the near future. The pace of capex has increased, which will help to achieve targeted growth ahead of time," said Kapur.
Ambuja Cement, part of Adani Group, which houses all cement assets, is a debt-free company and as of September 2024, cash and cash equivalent for the company was at Rs 10,135 crore, said Kapur. "During H1, approximately Rs 14,700 crore has been utilised, out of which Rs 12,350 crore has been spent on organic and inorganic growth," he added. The billionaire Gautam Adani-run conglomerate is snapping up smaller rivals to challenge India's top cement maker UltraTech, the Aditya Birla group firm. In the last 12 months, it has done three major acquisitions -- Penna Industries, Sanghi Industries and recently announced CK Birla group firm Orient Cement. Besides its subsidiary ACC has also acquired Asian Concretes and Cements.
"With the acquisition of Orient Cement our operating cement capacity will go up to 97 million tonnes. We are on course to commission our 4 million tonne clinker in Bhatapara in Chhattisgarh and the associated grinding units in Kanakrel and Farakka in West Bengal, Sindri in Jharkhand by the end of this financial year," this will take capacity to 100 MTPA in FY25. Besides, there are several other projects in which capacity is being added across India and after completion, Adani Cement will have 118 MTPA capacity by the end of the next fiscal. Currently, 21 MTPA capacity is under execution and 21 MTPA are at various stages.
"We have also identified 13 additional grinding unit projects for which land acquisition and statutory approvals are under progress, which shall enable us to reach 140 million tonnes by FY28," he said.
The company has a current market share of 15 per cent in the Indian cement market and has an internal target of achieving 20 per cent in the next three financial years by FY28. "We continue to strengthen to our position as market leader in the cement industry. Adani Cememt becoming stronger with an intense commitment towards capacity expansion through both organic and inorganic routes," he said.
The Adani group firm expects the cement demand to increase by around 4 to 5 per cent in the current fiscal, helped by initiatives such as government's thrust on infra and affordable housing. "We expect demand during FY 2025 to grow in the range of 4 to 5 per cent. India's per capita cement consumption currently at 275 kg still has a lot of headroom for growth and I believe over the next 10 years can reach a billion-ton cement Market," said Kapur.
Adani currently has 89 MTPA capacity after adding 22 MTPA in the last 24 months. The acquisitions and expansion have also helped Adani to reduce the logistics and other costs. It has 18 per cent cost reduction since Sep 22, when Adani entered into the cement business. "Various Capex and Opex programmes are in place to accelerate cost leadership journey," the company said in an investor presentation.
