Adani Group Acquires Orient Cement for Rs 8,100 Crore, Expands Cement Capacity
Ahmedabad, 22 October 2024: In a strategic move to bolster its cement production capacity, Ambuja Cements, a subsidiary of Adani Cement and part of the Adani Group, has signed a binding agreement to acquire a 46.8% stake in Orient Cement Ltd (OCL) for an equity value of ₹8,100 crore. This acquisition is aimed at strengthening Ambuja’s position in the cement market and accelerating its growth trajectory towards achieving a cement capacity of over 100 million tonnes per annum (MTPA) by FY 2025. The acquisition will be financed through internal accruals, ensuring that Ambuja remains debt-free.
Ambuja Cements Director Karan Adani commented on the acquisition: “This acquisition is a crucial step in our journey to expand our footprint in the cement industry. By adding OCL’s capacity, we are set to achieve our goal of 100 MTPA by FY 2025. This deal not only boosts our presence in core markets but also increases our national market share by 2%. OCL’s strategic locations, efficient plants, and robust infrastructure provide an excellent opportunity for future growth.”
OCL currently operates with a clinker capacity of 5.6 MTPA and cement capacity of 8.5 MTPA across its plants in Telangana, Karnataka, and Maharashtra. The company has additional capacity ready for expansion, with the ability to increase clinker capacity by 6.0 MTPA and cement capacity by 8.1 MTPA. Moreover, OCL has a valuable limestone mining lease in Rajasthan’s Chittorgarh region, which presents an opportunity for setting up additional capacity in North India.
CK Birla, Chairman of Orient Cement and the CK Birla Group, expressed confidence in the transaction, stating, “We have built a strong brand with a significant market presence, and I am confident that under Adani’s leadership, Orient Cement will continue to grow and thrive. This acquisition aligns with our strategy of focusing on consumer-centric and technology-driven businesses.”
Co-Chairperson of the CK Birla Group, Amita Birla, also highlighted the importance of sustainability in OCL’s operations: “Sustainability has always been a core part of our business model, and I believe Adani Cement will be the right partner to further this legacy, benefiting both our employees and customers.”
In addition to its cement operations, OCL has invested in renewable energy, including a 10 MW waste heat recovery system (WHRS) and a 33 MW renewable energy setup, contributing to the company’s sustainability efforts. Recent projects, such as the commissioning of a WHRS in Chittapur and ongoing solar power projects, demonstrate the company’s commitment to green energy initiatives.
The acquisition is expected to create synergies between Ambuja and OCL, enhancing efficiency in logistics, reducing costs, and optimizing capacity utilization. This deal marks another significant step for the Adani Group in expanding its cement business, following earlier acquisitions and expansion efforts.
