Ambuja Cements, the cement and building material company of Adani Group, has signed a binding agreement for the acquisition of Penna Cement Industries (PCIL) at an enterprise value of Rs 10,422 crore.Ambuja will acquire 100% shares of PCIL from its existing promoter group, P. Pratap Reddy and family. The acquisition will be fully funded through internal accruals.
The acquisition will improve its market share pan India by approximately 2% and in south India by about 8%.”By acquiring PCIL, Ambuja is poised to expand its market presence in south India. PCIL’s strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through debottlenecking and additional investment.
Importantly, the bulk cement terminals (BCTs) will prove to be a gamechanger by giving access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route. Our aim is to make PCIL highly competitive on cost and productivity and improve its operating performance,” said Ajay Kapur, CEO & whole time director of the company.
PCIL has 14 MTPA cement capacity, of which 10 MTPA is operational, and the remaining is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA) and will be completed within 6 to 12 months.
Around 90% of the cement capacity comes with railway sidings, and some are supported by captive power plants and waste heat recovery systems. Further, surplus clinker at the Jodhpur plant will support an additional three MTPA cement grinding capacity over and above 14 MTPA.
This acquisition adds 14 MTPA capacity and takes the company’s total capacity to 89 MTPA. With this the company is moving towards its target capacity of 140 MTPA by 2028
