To complete the acquisition on September 17, the Adani Group founder said the port-to-energy group has become the country’s second-largest cement producer in a single stroke.
To complete the acquisition on September 17, the Adani Group founder said the port-to-energy group has become the country’s second-largest cement producer in a single stroke.
a. the day after completion Ambuja Cements and ACC acquired for $6.5 billionBillionaire Gautam Adani said his group plans to double cement manufacturing capacity and become the most profitable manufacturer in the country.
They saw a manifold growth in cement demand in India due to record-breaking economic growth and the government’s boost to building infrastructure, which would give significant margin expansion.
In a speech given at an event on the completion of the acquisition on September 17, the Adani Group founder and chairman said that the port-to-energy group has become the country’s second largest cement producer in a single stroke.
The Adani Group last week completed the acquisition of Swiss company Holcim’s stake in the two companies.
Terming the acquisition as historic, he said the buyout is India’s largest ever inbound M&A transaction in the infrastructure and materials space and closed in a record time of 4 months.
In his speech released on 19 September, he said, “Our entry into this business comes at a time when India is witnessing one of the biggest economic booms the modern world has seen.”
Explaining the reason for entering the cement sector, he said that India is the second largest producer of cement in the world, but its per capita consumption is only 250 kg as compared to China’s 1,600 kg. “That’s about 7x the headroom for growth.” In addition, “with several government programs gaining momentum, the long-term average growth in cement demand is expected to be 1.2 to 1.5 times of GDP. We anticipate this number to grow by more than double,” he said.
With plans to invest trillions of dollars in infrastructure and housing in the country, Cement is an attractive “adjacent to our infrastructure business, particularly the group’s ports and logistics business, green energy business and the e-commerce platform being developed.” is,” he said.
He said the Adani Group’s ability to enhance operational efficiency would result in “significant margin expansion to become the most profitable cement manufacturer in the country”. “And we anticipate going from the current 70 million tonnes of capacity to 140 million tonnes over the next 5 years.”
On his group’s development philosophy, Mr. Adani, 60, said that it believes in India’s growth story. “India will become a $25-30 trillion economy by 2050, which points to great growth potential,” he said.
He said the group is the world’s largest solar power company and has committed to invest $70 billion in the clean energy business, including green hydrogen.
Adani Group is the largest airport operator in the country, with 25% passenger traffic and 40% air cargo. It is the largest port and logistics company in the country with a 30% market share.
“We are India’s largest integrated energy player spanning generation, transmission, distribution, LNG, LPG, city gas and piped gas distribution. Each of these businesses is growing at double-digit rate,” he said.
While the group has won some of the biggest road contracts in the country and is on its way to become the biggest player in the segment, a grand IPO by Adani Wilmar has made it the most valuable FMCG company in the country.
“We have announced our way into many new areas which include data centers, super apps, aerospace and defence, industrial clouds, metals and petrochemicals,” he said.
“Our finances are stronger than ever, and we continue to raise billions of dollars from international markets and strategic partners to further accelerate our growth.” He said the Adani Group has a market capitalization of $260 billion which has grown faster than any other company in India.