After the announcement of the acquisition of Sanghi Industries by Adani Group-owned Ambuja Cements, Karan Adani, CEO, Adani Ports and Special Economic Zones (APSEZ) said that the conglomerate will make investments to expand the captive port capacity of Sanghipuram in order to accommodate large vessel sizes of 8,000 DWT (deadweight tonnage).
Sanghi Industries runs an integrated unit at Sanghipuram in Gujarat’s Kutch district, which has a clinker capacity of 6.6 million tonnes per annum (MTPA), cement capacity of 6.1 MTPA and limestone reserves of 1 billion tonne. “The cement capacity will be expanded further and will be taken to 15 MTPA in next 2 years,” said Karan Adani.
Bulk terminals and grinding units will be created along the western coast to enable the movement of clinker and cement through the sea route at the lowest possible cost. Karan Adani further stated, “Our vision is to produce lowest cost clinker in the country at Sanghipuram and then transport this clinker as well as bulk cement through coastal roads to the markets of Saurashtra, South Gujarat, Mumbai and Mumbai Metropolitan Region, Karnataka and Kerala.” He further added that synergies with the assets of Adani ports will help the company in implementation of this strategy and that he is very confident that Adani Group will be the “lowest-cost supplier of cement in all of these markets”.
The acquisition is a way for Adani Cement Ltd (ACL) to expand its capacity to 73.6 MTPA in order to strengthen its position in India’s cement market where it entered only last September with the acquisition of majority stakes in Ambuja Cement and its subsidiary ACC Ltd.
“With the ongoing capex of 14 MTPA and commissioning of 5.5 MTPA cement capacity at Dahej and Ametha in the second quarter of FY23, the Adani Group’s capacity will be 101 MTPA by 2025,” said Karan Adani. He further added, “Ambuja Cement’s goal of 140 MTPA capacity by 2028 is well on track. And with this acquisition, we are very confident that we will achieve this ahead of time.”
Ambuja Cements has bought a 56.74 per cent stake in Sanghi Industries at an enterprise value of Rs 5,000 crore. The deal is the Gautam Adani-led conglomerate’s first major acquisition this year after the Hindenburg report in January.