Adani Cement started out as an acquisition. Part 2 is coming.

The Adani Group, which started its cement journey two years ago with a series of acquisitions, is in advanced discussions with the Odisha government for setting up its first greenfield cement plant.

Group company Ambuja Cement Ltd is likely to build the unit at a cost of 4 million tonnes per annum (mtpa) $Two people familiar with the matter, including a government official, said the amount was 300-35 billion rupees.

“The agreement with the state government is at an advanced stage. The manufacturing plant will be ready in two to three years,” one of the two people cited above said on condition of anonymity.

Queries emailed to the Adani Group and the Odisha government remained unanswered.

The Adani Group, which has so far acquired only the cement business, is also preparing a strategy to build new facilities from scratch as it aims to become India’s largest cement maker, the person said. As part of its eastern push, Adani recently announced plans to build a clinker grinding unit in Bihar for $1,600-2,000 crores. The Odisha plant will help the group further expand its footprint.

First new cement production capacity

“The production facility will cost at least $85-100 per tonne. This will be the group’s first-ever greenfield cement capacity. The group has completed discussions with the Odisha government and aims to have the production facility ready by FY28 Cement plants get ready,” said the person quoted above.

On August 3, Adani announced the construction of a 6 ton/year cement grinding facility in Bihar. “The cost of grinding facilities is about $45-$50 per ton,” the person said. The group plans to fund much of the expansion through internal accruals.

Even after last week’s acquisition of Oriental Cement, Adani still has enough funds to buy more assets and build new plants, people quoted earlier said.

“Our greenfield program is equally strong. In fact, if one looks at it, most of the acquisitions have huge potential for greenfield expansion opportunities and post-acquisition, these opportunities will become part of our brownfield program,” the first person said, adding After Dow acquired Penna Cement in June, the cement division has approx. $10,000-12,000 crore on the books, boosting cash flow in the September quarter.

“Although the September quarter this time was smaller than other quarters, Ambuja Cement will still have $It has cash of Rs 4000-500 billion on its books. There is no debt and a small amount of credit is available from banks if needed for a greenfield project or any high-profile acquisition,” said the first person.

plan separately

Meanwhile, Adani has a separate investment plan $Bihar’s cement and logistics industry, with an investment of Rs 5,500 crore, is still at an early stage.

Adani’s plan is to take on archrival UltraTech Ltd, India’s largest cement maker, in eastern India, where it has significant operations, particularly in the state of Bihar.

Adani Group also announced investment $1,600 crore to set up a new cement grinding plant at Warisaliganj in Bihar.

“The Bihar plan announced in August is also part of the greenfield strategy. We have an industry advantage in terms of cost as we have generation and transmission capabilities and an extensive logistics network. This cost advantage can be passed on to the end consumer even as we take up greenfield strategy, which cannot be copied by competitors,” one of the people mentioned above said.

Adani Group will enter the cement and building materials fields in 2022, intensifying industry consolidation. Both Adani Group and Aditya Birla Group are actively expanding their businesses through acquisitions.

After the acquisition of Penna Cement $After spending Rs 10,000 crore in June, Ambuja Cement signed a binding agreement on October 22 to acquire 46.8% stake in Oriental Cement Company, valuing the latter at Rs 8,100 crore. The group said the acquisition will help it achieve its target of annual production capacity of 140 tons by 2028.

Dongfang Cement currently has a clinker production capacity of 5.6 tons/year and a cement production capacity of 8.5 tons/year. The acquisition is likely to increase Adani Group’s market share in the national cement industry by 2%.

In its September quarter earnings announcement, UltraTech said that with the completion of its ongoing expansion plans by FY27 and obtaining statutory approvals for the acquisition of Kesoram Cement (10.75 tonnes per annum) and India Cements (14.45 tonnes per annum), total cement The production capacity will exceed 200 metric tons/year. At the same time, even after acquiring Oriental Cement, Adani’s total operating capacity will barely exceed 100 tons per year.