According to Gautam Adani, the government of India’s measures to promote infrastructure growth will significantly increase demand for cement.
At a gathering on Saturday, Chairman Gautam Adani discussed how the Adani Group had grown to become the second-largest cement producer in India. He also stated that the group had plans to increase its cement production capacity and become the most profitable maker in the nation.
After completing the acquisition of the Indian assets of Holcim Ltd., Adani Group intends to increase the annual capacity of cement production by 2027. The purchase of Holcim’s shares in Ambuja (63.19%) and ACC (4.48%; Ambuja directly owns almost 50% of ACC) by Adani Group was announced in May of this year. The open bid by the Adani Group for a 26% share in each of Ambuja and ACC expired on September 9, 2022.
When explaining the rationale for entering the cement market, he noted that although China has a per capita consumption of 1,600 kg compared to India’s 250 kg, which leaves nearly a 7x headroom for expansion. India is the second largest manufacturer of cement in the world.
At a Saturday event that was later posted on YouTube on Monday, Gautam Adani stated, “We anticipate going from the current 70 million tonnes capacity to 140 million tonnes in the next five years. He also added that the dani Group’s competency in driving operational efficiency will result in significant margin expansion to become the most profitable cement manufacturer in the country.
He predicted that the government’s push to build infrastructure and India’s record-breaking economic development would lead to a huge margin expansion and a multifold increase in cement demand.
He described the acquisition as historic and said that it was completed in a record-breaking 4 months, making it the largest inbound M&A transaction to ever take place in India in the infrastructure and materials sector. In the address, which was made public on Monday, he stated that “our entry into this market is happening at a moment when India is on the verge of one of the largest economic booms seen in the contemporary world.” Adani expects that attempts by the Indian government to promote infrastructure growth will significantly increase demand for cement.
Shares of Ambuja Cements rose by around 10% to a record high on Monday following the appointment of Indian business tycoon Gautam Adani as the organization’s new chairman. The company’s board approved a preferred offer of warrants worth Rs 20,000 crore to the Adani Group over the weekend.