After Sanghi Industries, Ambuja keeping its options open on acquiring other cement companies: Karan Adani

economictimes.indiatimes.com:

Karan Adani, Director, Ambuja Cements, says: “ We keep looking at opportunities. If it comes at the right price which is very strategic, we will keep our options open.” Coming to Sanghi Industries, with its location advantage and unique marine infrastructure, Adani says “the idea is that we want to make its Kachchh plant the lowest cost clinker production plant in the country and the target is to manufacture clinker at around Rs 1,500-1,600 per tonne.”Ambuja Cements has acquired a majority stake in cement maker Sanghi Industries at an enterprise value of Rs 5,000 crore. Can you explain the logic behind this move?First of all, there are a lot of location advantages in this transaction.

This company has an integrated unit in Kachchh. They have one billion tonnes of limestone reserves. They have lignite, which is right next to the plant.

So, coal is available at a very cheap price and the idea is that we want to make this plant the lowest cost clinker production plant in the country and our target is to manufacture clinker at around Rs 1,500-1,600 per tonne. We also want to use marine infrastructure. This plant is attached with a captive jetty and we want to use the marine infrastructure and expand that infrastructure and transport the clinker as well as bulk cement from this plant into South Gujarat, into Saurashtra region and Mumbai and going all the way down to Kerala.

We want to utilise the assets as well as the synergies with the footprint of Adani Ports and accelerate this journey. Obviously, other parts of the rationale behind this acquisition is with the limestone reserves. With the land as well as approvals being available, we want to expand the capacity.