Ambuja Cements Expands Southern Presence with Tamil Nadu Unit Purchase

In a strategic move to expand its presence in the southern market, Ambuja Cements, under the leadership of the Adani Group, announced on Monday the acquisition of a grinding unit in Tamil Nadu from My Home Groups for Rs 413.75 crore. This acquisition is poised to enhance Ambuja Cement's footprint in the southern states of Tamil Nadu and Kerala, leveraging the strategic location near Tuticorin Port for efficient coastal distribution.

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The deal, financed through internal accruals, elevates the Adani Group's total cement production capacity to 78.9 million tonnes per annum (MTPA). This acquisition not only broadens Ambuja Cement's market reach but also offers southern customers the opportunity to engage with one of India's most trusted cement brands. The proximity to Tuticorin Port is expected to provide logistical advantages and cost efficiency, particularly given Tamil Nadu's limited limestone resources.

With this latest acquisition, Ambuja Cements aims to capitalize on the unique competitive edge provided by the coastal movement of clinker from the Sanghipuram Plant. This strategy is anticipated to ensure cost-effective operations and strengthen the company's market position in the region.

The Adani Group had previously expanded its cement industry footprint by acquiring Sanghi Industries in December of the previous year. This acquisition included a 2,700-hectare integrated manufacturing unit along with a captive jetty. Further expansion plans include enhancing the capacity of the captive jetty at Sangipura in coastal Gujarat.

Ambuja Cements, alongside its subsidiary ACC Ltd, previously had a production capacity of 77.4 MTPA. This latest acquisition increases its capacity to 78.9 MTPA. Ajay Kapur, CEO of Cement Business at Adani Group, highlighted the additional benefits of inheriting an established dealer network and retaining current employees, which will facilitate a seamless transition and quick utilisation ramp-up.

The Adani Group has ambitious plans to capture approximately one-fifth of India's cement market by FY28, aiming for a capacity of 140 MTPA. Last month's infusion of Rs 6,661 crore into Ambuja Cements through the conversion of warrants into shares increased Adani Group's stake in India's second-largest cement company to 66.7%. Currently, Adani Cement ranks as the second-leading company in the sector after UltraTech Cement, which boasts a total capacity of 151.6 MTPA.

In September 2022, the Adani Group solidified its position in the cement industry by acquiring controlling stakes in Ambuja Cement from Swiss firm Holcim for USD 6.4 billion (approximately Rs 51,000 crore). This strategic acquisition underscores the Adani Group's commitment to expanding its footprint in India's burgeoning cement sector and enhancing its product offering across key markets.