Sanghi acquisition to help Ambuja strengthen market leadership, says Karan Adani

Ambuja Cement, a part of Adani Group, on Thursday announced acquisition of Gujarat-based Sanghi Industries at an enterprise value of ₹ 5,000 crore. As part of the deal, Ambuja Cements will acquire 56.74% shares of Sanghi Industries from its existing promoter group, Ravi Sanghi & family.

Soon after the acquisition, Adani Ports and Special Economic Zones (APSEZ) CEO Karan Adani says the acquisition of Sanghi Industries will help Ambuja strengthen its market leadership and increase its cement capacity to 73.6 million tonnes per annum (MTPA) from the current 67.5 MTPA.

“With the ongoing capex of 14 MTPA and with commissioning of 5.5 MTPA of cement capacity at Dahej and Ametha in Q2 of FY23, the Adani group’s capacity will be 101 MTPA by 2025,” says Karan Adani, the son of Gautam Adani.

Karan further says that Ambuja’s goal of 140 MTPA capacity by 2028 is well on track and with this acquisition the target will be achieved ahead of time.

“Sanghi Industries intergrated unit at Sanghipuram in Kutch Gujarat has clinker capacity of 6.6 MTPA, cement capacity of 6.1 MTPA and limestone reserves of 1 billion tonnes. The cement capacity will be expanded further and will be taken to 15 MTPA in next 2 years,” he says.

Sanghi Industries integrated manufacturing unit at Sanghipuram in Gujarat's Kutch district is India's largest single-location cement and clinker unit by capacity. With 2,700 hectares of land, the integrated unit has two kilns with a clinker production capacity of 6.6 MTPA and a cement grinding unit with a capacity of 6.1 MTPA. It has a captive power plant of 130 megawatt and a Waste Heat Recovery System of 13 MW. The unit is also connected with a captive jetty at Sanghipuram.

The CEO of Adani Ports says that the company will be investing in deepening and expanding the captive port capacity in order to accommodate vessel sizes of 8,000 deadweight tonnage (DWT). A DWT is a measure of how much weight a ship can carry.

“Our vision is to produce the lowest cost clinker in the country at Sanghipuram and then transport clinker as well as bulk cement through the coastal route to the market of Saurashtra, South Gujarat, Mumbai and Mumbai Metropolitan region, Karnataka and Kerala. Synergy with the assets of Adani ports will help us accelerate in implementation of this strategy. With the right implementation we are very confident that we would be the lowest cost supplier of cement in all these markets,” he says.

On acquisition, Gautam Adani, chairman of the Adani Group, says, "By joining hands with SIL, Ambuja is poised to expand its market presence, strengthen its product portfolio, and reinforce its position as a leader in the construction materials sector. With this acquisition, the Adani Group is well on course to achieve its target of 140 MTPA of cement manufacturing capacity by 2028 ahead of time."

"With SIL's limestone reserves of a billion tonnes, ACL will increase cement capacity at Sanghipuramto 15 MTPA in the next two years. ACL will also invest in expanding the captive port at Sanghipuram to handle larger vessels. Our aim is to make SIL lowest cost producer of clinker in the country," says Adani.