Adani Cement Eyes 140 MMTPA Capacity by FY-28, Orient Cement Takeover Underway
Ambuja Cement, part of the Adani Group, has set a target to expand its cement production capacity to 140 Million Metric Tonnes Per Annum (MMTPA) by FY-28. As a step towards this target, Ambuja Cement has signed a binding agreement with Orient Cement Ltd. for the purchase of 46.8% equity in the latter company for Rs. 8,100 crore on 22nd October 2024.
Adani Cement’s Roadmap to 140 MMTPA by FY-28
In its investor presentation following Q2 FY-25 results, Ambuja Cement highlighted that Adani Cement currently has a production capacity of 89 MMTPA, which it plans to increase to 140 MMTPA by FY-28. The company has several projects under execution that will contribute approximately 21 MMTPA to its overall production capacity.
Apart from the aforementioned projects, Adani Cement also has projects under various stages of implementation which will add another 21 MMTPA cement production capacity to its portfolio. However, Adani Cement has not given details of these projects.
Further as stated above, Adani Cement is in the process of acquiring major stake in Orient Cement. Once completed this acquisition will add 9 MMTPA to Adani Cement’s production capacity.
Details of Projects Currently Under Execution
Adani Cement has various projects under execution to expand its cement production capacity to about 119 MMTPA by Q4 of FY-26.
Some of these projects include the establishment of cement production plants in Sankrail and Farakka, West Bengal, each with a capacity of 2.4 MMTPA. Both plants are expected to be commissioned by Q4 of FY25. Additionally, a 1.6 MMTPA cement plant is being developed in Sindri, Jharkhand, with completion targeted for Q4 FY25.
In Uttar Pradesh, Adani Cement is constructing a 2.4 MMTPA plant in Salai Banwa, slated for completion by Q1 FY26. The company is also developing two 1.2 MMTPA plants — one in Bathinda, Punjab, expected to be completed by Q2 FY26, and the other in Dahej, scheduled for completion by Q3 FY26. In Maharashtra’s Kalamboli, a 1 MMTPA cement production plant is in the process of being set up. Furthermore, a 2.4 MMTPA plant is under construction in Marwar, with completion anticipated by Q2 FY26. Adani Cement is also adding a 2 MMTPA manufacturing facility in Jodhpur, and a 2 MMTPA plant in Krishnapatnam, Andhra Pradesh, scheduled for completion by Q3 FY26. Finally, a 2.4 MMTPA cement plant is being built in Warisaliganj, Bihar, expected to be operational by Q4 FY26.
As for clinker manufacturing expansion, Adani Cement is developing a 4 MMTPA clinker production facility in Bhatapara, Chhattisgarh, which is expected to be completed by Q4 FY25, and another 4 MMTPA clinker plant in Maratha, slated for completion by Q3 FY26. The company is also setting up a 3 MMTPA clinker plant in Jodhpur, which is expected to be completed by Q3 of FY-26. Orient Cement acquisition will add another 6 MMTPA to the company’s clinker production capacity. These expansions will take the company’s clinker capacity to 73 MMTPA from the current 56 MMTPA.
These projects represent a significant step towards Adani Cement’s capacity expansion goal.
Details of Orient Cement Acquisition
With the purchase of Orient Cement’s shares, Ambuja Cement will be the largest shareholder in the company. Ambuja will acquire all of the promoters’ shares in Orient Cement, which amount to 37.9% of the total shares. Apart from this Ambuja will also buy shares from other public shareholders, which will add another 8.9% to Ambuja Cement’s shareholding in the company, thereby taking it to 46.8%.
Hence, Ambuja Cement will be the promoter of Orient Cement Ltd., and will gain control of the company.
Adani’s stock filing stated that this acquisition will be funded by Ambuja Cement’s internal accruals and that the company continues to be ‘debt free’.
Orient Cement Acquisition to Add 2% to Adani Cement’s Market Share
Commenting on this acquisition, Mr. Karan Adani, Director of Ambuja Cement, pointed out that Orient Cement’s acquisition will facilitate the growth of Adani Cement’s market share in India by 2%. He also added “By acquiring OCL [Orient Cement Ltd.], Ambuja is poised to reach 100 MMTPA cement capacity in FY 25”.
Adani Cement currently holds a 15% market share in the Indian cement market and aims to increase this to 20% by FY28.
Mr. CK Birla, Chairman of Orient Cement and the CK Birla Group, said, “We are confident that the Adani Group, with its strong focus on cement and infrastructure, is the ideal new owner to drive continued growth at Orient Cement for our people and stakeholders”.
Brief Story of Adani Cement’s Inorganic Growth
Interestingly, Adani Cement’s growth in the Indian cement market has been primarily driven by inorganic expansions. Adani entered the cement sector by acquiring ACC and Ambuja Cement in September 2022.
Following this acquisition, Ambuja Cement made significant investments to develop cement manufacturing plants across India. After acquiring Ambuja Cement, Adani Cement also acquired Sanghi Industries in December 2023 and Penna Industries in August 2024.
By leveraging these strategic buyouts, Adani Cement targets to expand its presence in the Indian cement market.
During Ambuja Cement’s earnings call for the quarter ended 30th September 2024, Mr. Ajay Kapur, CEO of Adani Group’s Cement Business, said “We continue to strengthen to our position as market leader in the cement industry. Adani Cement becoming stronger with an intense commitment towards capacity expansion through both organic and inorganic routes”.
About Ambuja Cement Ltd.: Ambuja Cement Ltd. became a part of the Adani Group in September 2022. The company reported a turnover of Rs. 33,159.64 crore during FY-24.
