Indian conglomerate Adani plans to double its cement capacity to 140mn t over the next five years and become the country's largest cement maker by 2030.
It recently completed an acquisition of Switzerland-based cement maker Holcim's India business to become the second-largest producer in the Indian cement market.
Cement is a game of economics dependent on energy costs, logistics and distribution costs, the ability to transform production as well as gain significant supply chain efficiencies, Adani said on 16 September after completing the acquisition of Holcim's India business that includes stakes in two listed Indian companies — Ambuja Cement and ACC.
Each one of these capabilities is a core business for Adani and puts it on track to become the largest and most efficient cement manufacturer by no later than 2030, Adani group chairman Gautam Adani said.
The $10.5bn Holcim deal puts Adani, which has an acquired cement capacity of 67.5mn t/yr, just behind UltraTech in terms of size. The Adani group aims to double its cement capacity to 140mn t by 2027.
Ultratech has a cement production capacity of about 120mn t/yr and aims to add 41mn t/yr to reach 200mn t/yr by 2030, in addition to ongoing expansions to add 39mn t/yr by 2025. India will remain a strong growth market for a long time and after completing the current expansions, Ultratech will plan its roadmap to about 200mn t/yr capacity through organic and inorganic routes, the company said on 22 July without sharing details.
The Indian cement market is ready for further consolidation following Adani's entry, an industry source said, expecting the conglomerate to scout for more acquisition opportunities in the sector.
The Adani group is a diversified conglomerate with interests in power generation, coal mining and trading, ports, aerospace, agriculture and gas distribution. The firm has been expanding its focus on the renewable energy space in recent years, with plans to manufacture "green" cement.
India is the world's second-largest cement market after China. There is significant potential for growth of India's cement sector, Adani said earlier, with India's cement consumption at only 242kg per capita compared with a global average of 525kg. Rapid urbanisation, a growing middle class and affordable housing, together with a post-Covid-19 pandemic recovery in construction and other infrastructure sectors, are expected to drive growth in the cement sector.
Ambuja and ACC will benefit from Adani's integrated infrastructure platform, especially in the areas of raw materials, renewable power and logistics. Adani Enterprises, the group's flagship company, is India's largest thermal coal importer and used to trade in petroleum coke.
Indian cement producers use imported and domestic coal and coke as a fuel. Cement is a natural extension of Adani's power business, market participants said, with Adani Power being India's largest private-sector power producer. Its foray into cement will help the company use fly ash, a key raw material for manufacturing cement, from its power plants.
