Ambuja Cements Acquires 24 Limestone Mines, Targets Self-Sufficiency
The Adani Group aims to achieve a capacity of 140 million tonne per year by 2028.
Ambuja Cements Ltd. has secured 24 bids for fresh limestone mines, with an estimated total resource of 587 million tonne, as per the firm's yearly report. This comes on top of subsidiary Sanghi Industries Ltd.'s existing 1-billion tonne reserve.
Sanghi Industries was acquired by the Adani Group company last year for an enterprise value of Rs 5,185 crore.
"Winning bids for coal and limestone mines is critical to ensure self-sufficiency, with coal mines in Dahegaon-Gowari and the existing Gare Palma coal block catering to 40% of Ambuja Cements Ltd. coal requirements," an annual report said.
The Adani Group aims to achieve a capacity of 140 million tonne per year by 2028, and possess enough funds to achieve this goal through a mix of expanding existing facilities and acquiring new ones.
Earlier this month, Ambuja Cements announced the acquisition of Hyderabad-based Penna Cement Industries Ltd. at an enterprise value of Rs 10,422 crore in an all-cash deal, which will add 14 MTPA capacity, taking its total capacity to 89 MTPA.
During the analyst conference following the acquisition, Chief Financial Officer Vinod Bahety said that even after acquiring Penna Cement, which will boost its market share in the Southern region and enable its entry into Sri Lanka, the company will still have additional Rs 10,000 crore in cash by year-end.
"Since you all know that we have been sitting on good cash and cash equivalent, it will be a good deployment of this amount and earning much more than 15% in terms of ROCE (return on capital employed)," he said.
Besides, Ambuja Cements plans to expand the master supply agreement with its subsidiary ACC Ltd. and Sanghi Industries to increase revenue and profitability further.
The company reported selling 5.6 million tonne of cement and clinker to ACC during the period as per the master supply agreement.
The agreement yielded several benefits, including achieving synergies and economies of scale, enhancing operational and logistics cost efficiency, and bolstering sustainability by judiciously utilising fuel and other resources.
(With inputs from PTI.)
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