Adani-backed Amubuja wins 24 limestone mines
Cement

Adani-backed Amubuja wins 24 limestone mines

According to Ambuja Cements' annual report, the company, which is aggressively pushing for expansion, has disclosed that it has won 24 bids for new limestone mines estimated to have a total resource of 587 million tonnes of limestone. This is in addition to the 1 billion tonne reserve of Sanghi Industries, a Saurashtra-based company that the billionaire Gautam Adani-owned firm acquired last November at an enterprise value of Rs 51.85 billion.

The company stated that winning bids for coal and limestone mines is critical to ensuring self-sufficiency, with coal mines in Dahegaon-Gowari and the existing Gare Palma coal block catering to 40% of Ambuja Cements Ltd.'s (ACL) coal requirements. The Adani group has expressed ambition to achieve a capacity of 140 MTPA (million tonnes per annum) by 2028. It indicated it has adequate cash to reach this goal through a combination of brownfield expansion and acquisitions. Earlier in the month, the Adani Group announced the acquisition of Hyderabad-based Penna Cement at an enterprise value of Rs 10,422 crore, which will add 14 MTPA to ACL, taking its total capacity to 89 MTPA. It was noted that this was an all-cash deal, and during the analyst call after the transaction, ACL CFO Vinod Bahety said that even after acquiring Penna Cement, which will help increase its market share in the southern market and facilitate entry into Sri Lanka, ACL will still hold another Rs 100 billion in cash by the end of this year. He further mentioned, "Since you all know that we have been sitting on good cash and cash equivalent, it will be a good deployment of this amount and earn much more than 15% in terms of ROCE (return on capital employed)." Bahety added, "The entire acquisition will be funded through cash and cash equivalents. After all of this, by the end of this year, my estimate is that we will be holding almost Rs 100 billion in cash."

Furthermore, the company is increasing its share of alternative fuels and green power. "With an investment of over Rs 100 billion in green power projects, the company aims to power 60% of its expanded capacity through 1 GW of solar and wind power and 376 MW of waste heat recovery systems by FY 2027?28, leveraging compelling economic advantages," the report stated.

Ambuja Cements also disclosed plans to expand the master supply agreement with its subsidiary ACC Ltd. and the newly acquired Sanghi Industries Ltd. (SIL) to further increase revenues and profitability. "During the year under review, the company sold 5.6 million tonnes CLC (Cement and Clinker) to ACC under the master supply agreement," it said. The agreement yielded several benefits, including achieving synergies and economies of scale, enhancing operational and logistics cost efficiency, and bolstering sustainability by judiciously utilising fuel and other resources. "In the future, the company remains committed to exploring and expanding the master supply agreement, aiming to increase revenues and profitability further," it added.

Regarding the Indian cement industry, ACL noted that it is the second-largest producer globally. In FY 2022?23, the Indian cement market reached a substantial size of 397 MTPA, aided by robust growth in the housing sector and ongoing investments in infrastructure development. "The industry is projected to grow by an impressive 9 to 10% during FY 2023?24, reaching a total volume of 425 to 430 MTPA," it stated. ACL anticipates demand to increase by 8?9% in FY 2024?25 and foresees 150?160 MTPA in capacity additions over the next five years through a mix of organic and inorganic expansions, it concluded.

According to Ambuja Cements' annual report, the company, which is aggressively pushing for expansion, has disclosed that it has won 24 bids for new limestone mines estimated to have a total resource of 587 million tonnes of limestone. This is in addition to the 1 billion tonne reserve of Sanghi Industries, a Saurashtra-based company that the billionaire Gautam Adani-owned firm acquired last November at an enterprise value of Rs 51.85 billion. The company stated that winning bids for coal and limestone mines is critical to ensuring self-sufficiency, with coal mines in Dahegaon-Gowari and the existing Gare Palma coal block catering to 40% of Ambuja Cements Ltd.'s (ACL) coal requirements. The Adani group has expressed ambition to achieve a capacity of 140 MTPA (million tonnes per annum) by 2028. It indicated it has adequate cash to reach this goal through a combination of brownfield expansion and acquisitions. Earlier in the month, the Adani Group announced the acquisition of Hyderabad-based Penna Cement at an enterprise value of Rs 10,422 crore, which will add 14 MTPA to ACL, taking its total capacity to 89 MTPA. It was noted that this was an all-cash deal, and during the analyst call after the transaction, ACL CFO Vinod Bahety said that even after acquiring Penna Cement, which will help increase its market share in the southern market and facilitate entry into Sri Lanka, ACL will still hold another Rs 100 billion in cash by the end of this year. He further mentioned, Since you all know that we have been sitting on good cash and cash equivalent, it will be a good deployment of this amount and earn much more than 15% in terms of ROCE (return on capital employed). Bahety added, The entire acquisition will be funded through cash and cash equivalents. After all of this, by the end of this year, my estimate is that we will be holding almost Rs 100 billion in cash. Furthermore, the company is increasing its share of alternative fuels and green power. With an investment of over Rs 100 billion in green power projects, the company aims to power 60% of its expanded capacity through 1 GW of solar and wind power and 376 MW of waste heat recovery systems by FY 2027?28, leveraging compelling economic advantages, the report stated. Ambuja Cements also disclosed plans to expand the master supply agreement with its subsidiary ACC Ltd. and the newly acquired Sanghi Industries Ltd. (SIL) to further increase revenues and profitability. During the year under review, the company sold 5.6 million tonnes CLC (Cement and Clinker) to ACC under the master supply agreement, it said. The agreement yielded several benefits, including achieving synergies and economies of scale, enhancing operational and logistics cost efficiency, and bolstering sustainability by judiciously utilising fuel and other resources. In the future, the company remains committed to exploring and expanding the master supply agreement, aiming to increase revenues and profitability further, it added. Regarding the Indian cement industry, ACL noted that it is the second-largest producer globally. In FY 2022?23, the Indian cement market reached a substantial size of 397 MTPA, aided by robust growth in the housing sector and ongoing investments in infrastructure development. The industry is projected to grow by an impressive 9 to 10% during FY 2023?24, reaching a total volume of 425 to 430 MTPA, it stated. ACL anticipates demand to increase by 8?9% in FY 2024?25 and foresees 150?160 MTPA in capacity additions over the next five years through a mix of organic and inorganic expansions, it concluded.

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