Adani Group has seen fast-track expansion since May 2022, when it was the successful bidder to acquire Holcim India, consisting of ACC Ltd and Ambuja Cements. Built on a diverse industry portfolio - renewables, energy and utilities, transport and logistics, and financial services - the group is expected to bring strong investment to the Indian cement sector.
The group's cement capacity is currently more than 70Mta in India. The US$10.5bn acquisition of Holcim India was completed in September 2022, making Adani Group India's second-largest cement producer behind UltraTech Cement. Ambuja Cements has a cement capacity of approximately 31.5Mta and ACC Ltd has a cement capacity of around 38.5Mta. Adani Group holds a 63.15 per cent stake in Ambuja Cements, which in turn owns 50.5 per cent in ACC Ltd. Adani Group also owns a direct 6.64 per cent stake in ACC Ltd.
Doubling cement capacity
By March 2023 the group had 19Mta of cement capacity in northern India, 17Mta of cement capacity in the east, 8Mta of cement capacity in the central region, 14Mta of cement capacity in the west and 10Mta in the south. This included 30 cement production units made up of 14 grinding plants and 16 integrated works. The group's target is to increase cement capacity to 140Mta by the end of 2027.
Mr Gautam Adani, founder and chairman of Adani Group, explained why he wanted to enter the Indian cement sector on the eve of the acquisition of Holcim India. "Not only is India expected to remain one of the world's largest demand-driven economies for several decades, India also continues to be the world's second-largest cement market and yet has less than half [242kg] of the global average [525kg] per capita cement consumption," Gautam Adani said.
Priority projects in FY23-24 are the capacity expansion projects at the brownfield grinding plants of Sankrail (2Mta), Bhatinda (1Mta), Farakka (2Mta) and the greenfield projects at Kharagpur (2Mta), Hoshiarpur (2Mta) and Mirzapur (2Mta). Clinker expansion projects include the brownfield modernisations at Bhatapara (4Mta) and Chandrapur (4Mta), as well as the greenfield projects at Mundra (3.75Mta) and Ametha (1Mta).
Reducing CO2 emissions
Adani Group is expanding its cement market share while attempting to reduce its CO2/t of cement produced. ACC (currently at 750kg/t) has a set target 400kg/t by 2030, while Ambuja Cements (currently at 523kg/t) has targeted 435kg/t of CO2 emissions by 2030. To achieve these targets, the group has to use greener practices.
WHRS, blended cement and renewables
As part of its new carbon reduction strategy, Adani Group plans to increase its waste heat recovery system (WHRS) capacity. In 2022 WHRS projects were commissioned at Ambuja Cement's Bhatapara, Rauri and Marwar plants. Work also began on installing WHRSs at Ambuja's Ambujanager and Martatha cement plants. Furthermore, at ACC Ltd's Jamul and Kymore cement plants WHRS projects were commissioned in 2022. By the end of FY23-24 the group aimed to spend a total capex of INR70,000m (US$842m), which included increasing WHRS to 73.6MW in the group.
Another key step in reducing its carbon footprint is offering customers a product portfolio that includes blended cements. Approximately, 85 per cent of the group's cement production consists of blended cement products. The group can operate synergies with its use of fly ash from its Adani Power Co. It has meant that the clinker factor has fallen to 60 per cent. Along with UltraTech Cement, ACC and Ambuja Cements comprise the leading brands that maintain a premium retail price of more than INR340/bag.
The group is also a big player in the renewables market. Adani Green Energy Ltd is one of the main subsidiaries. September 2022 saw Gautam Adani announce the group's US$100m investment plant over the next decade. Included in this was 45GW of hybrid renewable power generation. The most immediate renewable projects include a 600MW solar plant and a 150MW wind farm in Khavda, Gujarat, plus a 250MW solar power plant in Rajasthan, announced in December 2023.
Going forward
The future growth strategy has targeted nine high growth states – Rajasthan, Punjab, Himachal Pradesh, Uttar Pradesh, Jummu & Kashmir, Bihar, Jharkhand, Maharasthra and Karnataka. The group has already acquired Sanghi Industries to add 6.1Mta of cement capacity at Sanghipuram in western India. Furthermore, in January 2024, the group announced that Ambuja Cements was constructing a 6Mta cement plant in Telangana. This week, it was announced that the group is considering adding a cement plant in Godda where it already has a power plant. Reaching the targeted 140Mta of cement capacity will need continued investment in a progressive capex programme, and based on current activity, Adani looks to be on track.