Ambuja Cements Completes Acquisition Of Sanghi Industries At An Enterprise Value Of ₹5,185 Cr

Ambuja Cements Completes Acquisition Of Sanghi Industries At An Enterprise Value Of ₹5,185 Cr

With the acquisition funded entirely through internal accruals, ACL holds a controlling stake of 54.51% in SIL.

FPJ Web DeskUpdated: Tuesday, December 05, 2023, 11:06 AM IST
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Ambuja Cements Completes Acquisition Of Sanghi Industries At An Enterprise Value Of ₹5,185 Cr | Image: Ambuja Cement (Representative)

Ambuja Cements Limited (ACL), the cement and building material company of the diversified Adani Group, on Tuesday announced that the company has successfully completed the acquisition of Sanghi Industries Limited (SIL), marking a significant milestone in its growth journey, the company announced through an exchange filing.

This strategic acquisition, valued at an Enterprise Value of Rs. 5,185 Crores, enhances Ambuja Cement’s market presence underscoring Adani Group’s steadfast commitment to India’s housing and infrastructure development.

With the acquisition funded entirely through internal accruals, ACL holds a controlling stake of 54.51% in SIL. ACL is committed to leveraging operational synergies resulting from this acquisition to enhance efficiency, reduce costs, and maintain a sustainable approach to cement production.

SIL’s Sanghipuram 2,700-hectare integrated manufacturing unit stands out as India’s largest single-location cement and clinker production facility. This facility comprises of two kilns with an impressive clinker production capacity of 6.6 MTPA, a cement grinding unit of 6.1 MTPA, a dedicated 13 MW captive power plant and an efficient 13 MW Waste Heat Recovery System. The unit is seamlessly connected to a captive jetty in Sanghipuram.

ACL's Strategic Acquisition of SIL to Propel Cement Capacity Along West Coast to 15 MTPA

The acquisition of SIL, with its billion-tonne high quality surface mining limestone reserves, positions ACL to expedite its unique coastal strategy, aiming to increase the cement capacity to 15 MTPA along the West Coast on the strength of SIL’s low-cost clinker.

This initiative will leverage the strengths of Ambuja and ACC brands, Adani Group's expertise in ports and shipping, and the cost advantage of the Sanghipuram unit. ACL will invest in expanding the existing captive port at Sanghipuram to accommodate larger vessels, contributing significantly to the nation's infrastructure development by meeting the growing demand for cement across Gujarat, Maharashtra, Karnataka & Kerala at a very competitive cost. This is expected to be commissioned over next 30 months.

SIL Acquisition Enables ACL's Immediate Capacity Boost and Green Power Generation

SIL provides an immediate opportunity for low-cost debottlenecking, increasing clinker capacity by 0.5 MTPA and cement capacity by 1.5 MTPA. The unit also offers potential for green power generation, reaching up to 45%, incorporating an additional 12 MW WHRS and 30 MW of Solar/Wind power. This multifuel flexibility enables the utilization of locally available lignite and an increase in AFR consumption to up to 20%, positioning Sanghipuram as the largest single-location clinker complex and consistently one of the lowest-cost producers.

Ajay Kapur, CEO, Cement Business said, "This acquisition represents a significant step forward in our journey solidifying Adani Group’s leadership position in India's cement industry. It strengthens our commitment to delivering high-quality products and services to our customers while contributing to India's infrastructure development. We welcome the employees of Sanghi Industries into the Adani family and look forward to capitalizing on the synergies this acquisition offers."

Ambuja Cements Limited shares

The shares of Ambuja Cement on Tuesday at 10:58 am IST were trading at Rs 504.85, up by 6.39 percent.

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