- The acquisition will be fully funded through internal accruals.
- Sanghi Industries Ltd (SIL) has clinker capacity of 6.6 MTPA (million tonnes per annum), cement capacity of 6.1 MTPA and limestone reserves of 1 billion tonnes.
- SIL’s Sanghipuram unit is India’s largest single-location cement and clinker unit by capacity, with a captive jetty and captive power plant.
- With this acquisition, Ambuja Cements’ capacity will increase to 73.6 MTPA.
- Ambuja’s goal of 140 MTPA capacity by 2028 will be achieved ahead of time.
- Our aim is to make SIL lowest cost producer of Clinker in the country.
- Ambuja will increase cement capacity at Sanghipuram to 15 MTPA in the next two years.
NE BUSINESS BUREAU
AHMEDABAD, AUG 4
Ambuja Cements Ltd (ACL), the cement and building material company of Adani Cement and part of the diversified Adani Group, and Sanghi Industries Ltd (SIL) have on Thursday announced that they have signed a share purchase agreement at an enterprise value of Rs 5,000 crore. ACL will acquire 56.74% shares of SIL from its existing promoter group, Ravi Sanghi & family. The acquisition will be fully funded through internal accruals.
Promise to double our cement capacity by 2028 on track. Delighted to announce addition of @CementSanghi, India's most efficient / lowest cost clinker manufacturer to Adani portfolio. As part of @AmbujaCementACL, Sanghi Cement (in our karmabhoomi Kutch) significantly leverages our… pic.twitter.com/pjcUZFN3IH
— Gautam Adani (@gautam_adani) August 3, 2023
“This landmark acquisition is a significant step forward in Ambuja Cements’ accelerating growth journey,” said Gautam Adani, Chairman of the Adani Group.
“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 Sanghipuram to 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.”
Commenting on the transaction, Ravi Sanghi, Chairman and Managing Director, Sanghi Industries Limited, said, “We are optimistic about the acquisition by Ambuja Cements, recognising it as a mutually beneficial opportunity for both the shareholders. With pride in the exceptional assets developed at Sanghipuram, the combination of the two holds the potential to establish the world’s largest clinker manufacturing complex. This strategic collaboration stands to propel growth and innovation, creating a formidable force in the cement industry, and enhancing value for all stakeholders involved.”
SIL’s 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 MW and a Waste Heat Recovery System of 13 MW. The unit is also connected with a captive jetty at Sanghipuram.
The acquisition of SIL will help ACL to strengthen its market leadership and increase its cement capacity to 73.6 MTPA from the current 67.5 MTPA. With the ongoing capex of 14 MTPA and with commissioning of 5.5 MTPA capacity at Dahej and Ametha by Q2 of FY24, the Adani Group’s capacity will be 101 MTPA by 2025.
Given the Adani Group’s strength in building and operating marine infrastructure, the port at Sanghipuram will be expanded to handle vessel sizes of 8,000 DWT (deadweight tonnage). Bulk terminals and grinding units will be created along the western coast to enable movement of clinker and cement through the sea route at the lowest possible cost.
SIL also has a bulk cement terminal each at Navlakhi Port in Gujarat and Dharamtar Port in Maharashtra. Most of the cement is transported through the sea route, which is environment-friendly and cost competitive. SIL has a network of 850 dealers, with market presence in Gujarat, Madhya Pradesh, Rajasthan, Maharashtra and Kerala.
