Displaying items by tag: Telangana

Adani Group’s subsidiary Ambuja Cements signed a deal this week to buy Penna Cement for US$1.25bn. The agreement adds 14Mt/yr of cement production capacity to the group with a focus in the south of India. The acquisition is a big step towards the group’s target of reaching a capacity of 140Mt/yr by 2028. Ajay Kapur, the head of Ambuja Cements, also singled out the advantage the company hopes to gain from taking control of Penna Cement’s terminals saying that they would “prove to be a gamechanger by giving access to the eastern and southern parts of peninsular India.” The move is expected to increase the group’s market share in India by 2%, and by 8% in South India.

Penna Cement operates four integrated plants in Andhra Pradesh and Telangana with a capacity of 7Mt/yr. Two of these units also include waste heat recovery installations and one has a captive power plant. It runs two grinding plants in Andhra Pradesh and Maharashtra with a capacity of 3Mt/yr. Another integrated plant is being built at Jodhpur in Rajasthan and a grinding plant at Krishnapatnam in Andhra Pradesh. Finally, the company owns four bulk cement terminals at Kolkata, Gopalpur, Karaikal and Kochi in India, one at Colombo in Sri Lanka and it also owns a 25,000t cement carrier.

Adani Group’s march towards that target of 140Mt/yr by 2028 started off in mid-2022 when it purchased Ambuja Cements and ACC from Holcim. This gave it a starting capacity of 68Mt/yr in the cement sector. Various smaller additions followed including new plants at Ametha and Dahej and the acquisitions of Asian Cement and Concrete, MyHome Industries and Sanghi Industries. The latter company was the biggest of these purchases. Once the in-progress projects from Penna Cement are built, Adani Group should have a capacity of 93Mt/yr. Another 20Mt/yr is reportedly at various stages of execution. The remaining 27Mt/yr is described as being ‘blueprint ready.’

Generally, the local financial press has been in favour of the transaction agreeing with the geographic advantages of Adani Group increasing its presence in the southern states. The benefits of the high number of railway sidings at Penna Cement’s plants were also commented upon as a means for Ambuja Cements to reduce its costs per tonne of cement. The logistics benefit from the port terminals is also expected by Adani Group’s chief financial officer to reduce the group’s logistics costs with an impact expected within the next year. However, it has been reported that Penna Cement’s operating performance had been weaker in the last financial year due to low sales volumes, poor operational efficiency and high coal costs. A takeover by Adani Group could certainly fix the latter two issues. Yet, it has also been reported that competition in the cement markets in Andhra Pradesh and Telangana is up, due to a mismatch between supply and demand. So, improving Penna Cement’s capacity utilisation in these regions might be harder to solve than simply being absorbed into Adani Group.

India’s two largest cement producers both have plans in motion to mount up production capacity by the end of the decade in what has been dubbed ‘the battle of the billionaires.’ The market leader is UltraTech Cement and it has shown reluctance to cede ground to the cement newcomer Adani Group. The former company’s current target is to make it to just under 190Mt/yr by 2027. It said it had a capacity of 152Mt/yr in May 2024. It is ahead of Adani Group by this measure but there is still plenty of scope for surprises. Given the rivalry between the companies there is a regular stream of speculation about which of the smaller cement producers they might be about to buy at any given time. For example, in October 2023 HeidelbergCement India was rumoured to be courting offers from UltraTech Cement, Adani Group and JSW Cement. Last week, Adani Group was reportedly interested in buying either Saurashtra Cement, the cement business of Jaiprakash Associates, Vadraj Cement or… Penna Cement. Occasionally the rumours are true after all. UltraTech Cement remains in first place for now but the situation may change.

India: Shree Cement has inaugurated its Guntur cement plant in Andhra Pradesh in southern India. The producer says that the move raises its cement capacity by 5.6% to 56.4Mt/yr, with six integrated cement plants. It already operates one other plant in South India, the 2.4Mt/yr Kodla cement plant in Karnataka. Press Trust of India News has reported that the Guntur cement plant cost US$300m and will employ 700 people. It will serve the ‘growing markets’ of Andhra Pradesh and Telangana. The plant will co-process up to 30% alternative fuel, consisting of municipal solid waste and biomass, as cement fuel.

Managing director Neeraj Akhoury said "We're committed to growing responsibly. The Guntur plant reflects this by using advanced technology for manufacturing and controlling emissions, making high quality cement with the efficient use of energy.”

India: Ambuja Cements has signed a memorandum of understanding (MoU) with the government of Telangana for the construction of a new cement facility in the state. The News Minute has reported that the producer plans to invest US$168m in the project. The MoU is part of an agreement between parent company Adani Group and the state of Telangana covering investments worth US$1.49bn. Other projects include an MoU with Adani Group’s renewables subsidiary Adani Green Energy for the construction of a total of 1350MW of energy storage capacity.

India: UltraTech Cement, India’s largest cement producer has commenced negotiations to acquire promoters’ stakes in Kesoram Industries, which sells cement under the Birla Shakti brand. It has two cement plants: Vasavadatta Cement in Sedam, Karnataka, and Kesoram Cement, located in Basantnagar, Telangana. The two plants have a combined cement capacity of 10.8Mt/yr.

India: The Hindu newspaper has reported that Adani Cement and UltraTech Cement may submit offers for Heidelberg Materials’ Indian business. This follows the news that parent company Heidelberg Materials has reportedly entered into talks with JSW Cement over the possible sale of the business. It consists of cement plants in Andhra Pradesh, Madhya Pradesh, Karnataka and Telangana, in addition to a cement terminal and four grinding plants across India.

Global Cement reported on 4 October 2023 that Heidelberg Materials’ Indian subsidiary HeidelbergCement India had said it was ‘unaware’ of any discussions between its parent company and JSW Cement.

India: Police are investigating an incident in which a construction worker died and two others were injured at My Home Industries’ Huzurnagar cement plant in the Suryapet District of Telangana. Workers were laying concrete for a new medium-rise building on the site on 25 July 2023, when a pipe conveying concrete became congested. Three workers succeeded in clearing the blockage, however this caused a powerful burst of concrete, knocking them into a lift, which fell to the ground floor. The Indian Express newspaper has reported that 32 year-old Arvind Singh died, while his colleague Raja Singh is receiving treatment for a head injury in Hyderabad. The third worker, Hassan Jamal, has since been discharged from hospital.

Police have reportedly filed charges of negligence against the contractor responsible for the site.

India: Orient Cement has laid the foundation stone of an expansion to its Devapur cement plant in Telangana's Mancherial District. The Hindu Online News has reported that the project will increase the plant's capacity by 60% to 8Mt/yr. Orient Cement will reportedly participate in the establishment of the nearby Belampalli skill development centre to help train local youths.

India: The government of Telangana has asked the Indian government for US$612m in funding for the planned reopening of state-owned Cement Corporation of India's Adilabad cement plant, alongside other projects. The Indian government will publish its 2023 - 2024 Union Budget in January 2023. The Times of India newspaper has reported that funding has been insufficient for the Telangana state government to realise its industrial growth plans over eight successive previous budgets.

India: Dow Jones Institutional News has reported that Adani Group is in talks with a ‘major shareholder’ of Orient Cement over a possible acquisition of the latter’s stake in the CK Birla Group company.

Orient Cement first began producing cement in Telangana in 1982, and has since spread to Karnataka and Maharashtra, with a cement production capacity of 8Mt/yr.

Orient Cement previously leased land in Maharashtra for a new grinding plant from coal-fired power plant Adani Power Maharashtra, an Adani Group subsidiary, in late 2021. Adani Group entered the cement sector following its acquisition of ACC and Ambuja Cements from Switzerland-based Holcim on 16 September 2022.

India: Sagar Cement has appointed KV Vishnu Raju as its chair. He succeeds K Thanu Pillai in the post.

Vishnu Raju is a graduate in Chemical Engineering from the National Institute of Technology in Tiruchirapalli and he holds a master's degree in Chemical Engineering from the Michigan Technological University in the US. He worked as an executive director and then managing director of Raasi Cements in the 1990s. He was later on the board of Anjani Portland Cement as its chair and managing director from 1999 to 2014.

Sagar Cement operates three integrated plants and two grinding plants in Andhra Pradesh, Madhya Pradesh, Orissa and Pradesh Telangana.