Billionaire Gautam Adani said his group has planned to double cement manufacturing capacity and become the most profitable manufacturer in India.
Days after completing a $6.5 billion acquisition of Ambuja Cements and ACC, the world’s second richest man saw a multifold rise in cement demand in the country on the back of record-breaking economic growth and the government's infrastructure creation push, which will give significant margin expansion.
Gautam Adani, founder and chairman, Adani Group, said the ports-to-energy conglomerate has in a single stroke become the second-largest cement manufacturer in the country. He said that in a speech made at an event to mark the completion of the acquisition on September 17 (Friday).
Adani Group last week completed acquisition of Swiss major Holcim's stake in the two companies. According to a release by the group on Monday, Adani said this buyout is India's largest ever inbound M&A transaction in the infrastructure and materials space and closed in a record time of four months.
"Our entry into this business is happening at a time when India is on the cusp of one of the greatest economic surges seen in the modern world," he said, while adding that India is the second-largest producer of cement in the world, its per capita consumption is just 250 kg compared to 1,600 kg of China.
"This is almost a 7x headroom for growth as several of the government's programmes gather momentum, the long-term average growth in cement demand is expected to be 1.2 to 1.5 times the GDP. We anticipate growing at twice this number," he said in the release.
With trillion-dollar investment planned in infrastructure and housing in the country, cement is an attractive "adjacency to our infrastructure business, especially the group's ports and logistics business, green energy business, and the e-commerce platform being developed," he pointed out.
Adani Group's competency in driving operational efficiency will result in "significant margin expansion to become the most profitable cement manufacturer in the country," he said. "And we anticipate going from the current 70 million tonne capacity to 140 million tonne in next 5 years." On his group's growth philosophy, Adani, 60, said it is the belief in India's growth story.
India will be a $25-30 trillion economy by 2050, which points to huge growth prospects, Adani said.
The group is the world's largest solar power company and has committed $70 billion investment in clean energy business including green hydrogen, he said.
Adani Group is the largest airport operator in India, with 25 per cent of passenger traffic and 40 per cent of air cargo. It is the largest ports and logistics company in the country with a 30 per cent market share.
"We are India's largest integrated energy player spanning generation, transmission, distribution, LNG, LPG, city gas and piped gas distribution. Each of these businesses is growing at double-digit rates," he said.
While the group has won some of the largest road contracts in the country and is on the way to becoming the largest player in this sector, a grand IPO of Adani Wilmar has made it the highest-valued FMCG company in the country.
"We have declared our path forward in multiple new sectors that include data centers, super apps, aerospace and defence, industrial clouds, metals, and petrochemicals," he said.
On the conglomerate’s market cap, he said, it stands at $260 billion, having grown faster than any company ever in India.