Adani Group Plan: After the acquisition of Sanghi Industries, Adani Group is eyeing some more acquisitions. Adani Group is planning to increase its total cement manufacturing capacity to 140 million tonnes in the next five years. In an interview to ET, Karan Adani, director of Ambuja Cement, said the company is open to more acquisition opportunities.
How did the deal with Sanghi Industries happen?
Karan Adani told that there are three unique things about this company. First of all, this company has 1 billion tonnes of limestone reserves. In this case, the capacity to add more cement capacity increases.
Secondly, lignite deposits are very close by, due to which the cost of production of clinker can be one of the lowest in the country. Third, the integrated cement unit at Sanghipuram in Kutch is just 150 km from Mundra port.
Sanghi Industries will be a debt free company
Karan Adani said that after the acquisition, Sanghi Industries will be a debt-free company. Ambuja and ACC had a combined cash balance of about Rs 11,800 crore as of the first quarter.
This year we will add additional cash of Rs 3000 crore after capital expenditure, tax and dividend. He said that with the acquisition of Sanghi Industries, he would like to end this financial year with cash of about Rs 11,000 crore. He said that the entire loan will be repaid with the acquisition.
And acquisition can be planned
Karan Adani, son of Gautam Adani, said that we will be looking for opportunities where we can get the property at a cheaper price than what it would cost for our brownfield expansion. If such a plan comes to hand then there will be no difficulty in acquisition.
Lowest cost cement producer in the country
Karan Adani said it has improved operating cost structures in the cement business every quarter after the acquisition of Ambuja and ACC. He said that there is still a long way to go in terms of further reforms in its cost structures.
Currently, energy, logistics and raw materials account for 70 per cent of the cost of cement production. We will work towards reducing those costs and be the lowest cost cement producer in the country.
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