Ambuja Cement, backed by billionaire Gautam Adani, has agreed to acquire Penna Cement Industries for $1.2 billion. This acquisition will boost Ambuja’s annual cement production capacity by 14 million tonnes, bringing it closer to its target of 140 million tonnes by 2028. This move will help Ambuja Cement expand its market presence in south India and strengthen its position as a leading player in the cement industry nationwide. The deal will also narrow the gap with Ultratech Cement, the largest cement manufacturer in India with an annual production of almost 153 million tonnes.
Recognizing Penna’s strategic advantages, Ambuja Cement highlighted the Hyderabad-based company’s favorable location and abundant limestone reserves, which will support the group’s future expansion plans. Penna Cement currently operates at an annual capacity of 10 million tonnes and is in the process of building two additional plants that will increase its output by 4 million tonnes within the next 12 months. In addition to the increased capacity, Penna’s bulk cement terminals will give Ambuja access to eastern and southern India, as well as an entry point to Sri Lanka via sea routes.
The Adani Group, led by Gautam Adani, has been increasing its investments in the cement business as India looks to modernize its infrastructure and build more homes. The group entered the cement business in 2022 with the acquisition of Ambuja and its subsidiary ACC for $10.5 billion from Holcim. Last year, the group also acquired Sanghi Industries for $202 million. With a net worth of $68 billion, Adani is the second wealthiest person in India according to Forbes Asia’s list of the country’s 100 richest individuals. In addition to cement, the Adani Group’s business empire includes airports, mining, ports, and power generation.
This acquisition is seen as a significant step forward in Ambuja Cement’s growth journey and will significantly increase the group’s production capacity. The deal with Penna Cement Industries will help Ambuja Cement strengthen its market presence in south India and enhance its position as a leading player in the Indian cement industry. With the addition of Penna’s facilities and resources, Ambuja Cement will be better positioned to meet the growing demand for cement in the country and expand its operations in key regions.
The acquisition of Penna Cement Industries by Ambuja Cement is part of the Adani Group’s larger strategy to expand its presence in the cement industry and capitalize on the construction boom in India. By acquiring Penna Cement Industries, Ambuja Cement will be able to leverage the strategic advantages of the Hyderabad-based company, including its favorable location and abundant limestone reserves, to support its future expansion plans. This move will also give Ambuja Cement access to new markets in eastern and southern India, as well as provide an entry point to Sri Lanka via sea routes, further enhancing the group’s growth prospects in the region.
Overall, the acquisition of Penna Cement Industries by Ambuja Cement represents a significant milestone in the group’s growth journey and is expected to have a positive impact on its market position and production capacity. With the support of the Adani Group and its strong financial backing, Ambuja Cement is well-positioned to capitalize on the opportunities in the Indian cement market and further strengthen its foothold in the industry. This deal highlights the group’s commitment to expanding its presence in key markets and reinforces its position as a key player in the Indian cement industry.
