Ambuja Cements Acquires Sanghi Industries for Rs 5,185 crores

Ambuja Cements (ACL) has successfully finalized the acquisition of Sanghi Industries (SIL), securing a commanding 54.51 percent stake in SIL and valuing the company at Rs 5,185 crore.

SIL's Sanghipuram manufacturing unit, situated in the Kutch district of Gujarat and sprawling across 2,700 hectares, stands out as India's largest single-location cement and clinker unit in terms of capacity. Boasting a clinker production capacity of 6.6 million tpa, a cement grinding unit of 6.1 MTPA, and a 13 MW captive power plant, the facility also possesses an impressive billion-tonne high-quality surface mining limestone reserve.

As part of its strategic vision, ACL is set to invest in the expansion of the existing captive port at Sanghipuram, enabling the accommodation of larger vessels. This move aligns with ACL's commitment to contributing to infrastructure development and meeting the escalating demand for cement in Gujarat, Maharashtra, Karnataka, and Kerala, all while maintaining competitive cost dynamics. The anticipated completion of this expansion is within the next 30 months, and the financing for this strategic acquisition will be entirely sourced from internal accruals.

Furthermore, ACL aims to capitalize on synergies by implementing low-cost de-bottlenecking measures, enhancing clinker capacity by 0.5 MTPA, and boosting cement capacity by 1.5 MTPA. The Sanghipuram unit presents additional opportunities for green power generation, potentially reaching up to 45 percent, through the addition of a 12 MW Waste Heat Recovery System (WHRS) and 30 MW of solar/wind power.

The utilization of locally available lignite and an increase in Alternative Fuel and Raw Material (AFR) consumption up to 20 percent further solidify Sanghipuram's position as the largest single-location clinker complex and one of the most cost-effective producers.

This strategic move positions ACL to accelerate its unique coastal strategy, with a targeted increase in cement capacity to 15 MTPA along the West Coast states. The company is poised to leverage the synergies arising from this acquisition to fortify its market presence and contribute significantly to the cement industry's growth in the region.

News by Rahul Yelligetti