Adani Group in Talks with The Orient Cement to Expand its Reach Over the Cement Manufacturing Sector

1. ADANI GROUP IN TALKS WITH THE ORIENT CEMENT TO EXPAND ITS REACH OVER THE CEMENT MANUFACTURING SECTOR

2. Adani Group, one of the most popular names in the infrastructure and material sector of India, with an extremely strong presence in various sectors like ports, airports, energy, mines, and real estate, has been currently planning on acquiring control over another important sector of the Indian economy, which is the cement sector. The conglomerate considers diversification of its portfolio as a part of its business agenda and has been working unhindered post the Adani Supreme Court case. It has yet to acquire its hold over some of the major sectors of India.

3. WHY DID THE ADANI GROUP TAKE INTEREST IN THE CEMENT SECTOR? • In a country like India, where infrastructure development plays a major role, the cement industry is indeed one of the most crucial Industries. So, by venturing into the cement industry, the Adani Group can further contribute to its growth and development. It will alter the economic condition of India to a considerable extent. The Adani Group is also focussed on the fast-paced expansion of the Indian infrastructure industry, which requires a consistent cement supply. • India has been building bridges, highways, airports, and houses at an extremely fast pace. It is also the second-largest cement producer in the world after China. However, the per capita consumption of cement is quite low, which is just 250 kg as compared to China's 1600 kg. This is what attracted the Adani Group to the cement sector. Last year, it made a huge acquisition in the cement sector. This brought its name to being India's second biggest cement producer. The Adani Group's works in the cement sector received a setback during the Adani Supreme Court case, but very soon, it was back to business.

4. ADANI GROUP'S ACQUISITIONS IN THE CEMENT SECTOR: • Gautam Adani, the founder of the Adani Group, believes that the cement demand in the country will have an average growth of 1.2 to 1.5 times the GDP growth of India. This is a very attractive business prospect for the Adani Group. After acquiring three major cement companies, ACC, Ambuja, and Sanghi, within less than a year, the Adani Group plans to make another huge strategic acquisition. • The Industrialist CK Birla has approached Gautam Adani to sell his promoter's stake in Orient Cement after rejecting offers from various domestic players for failing to meet the valuation demand. After the Adani Supreme Court cleared the conglomerate of charges of stock manipulation, a lot of other foreign investors have also started showing interest in the Adani Group.

5. CONCLUSION • Cement was one of the missing pieces in the Adani Group's infrastructure game. So, the conglomerate turned its attention to the cement sector in 2022. It made a huge grab at India's infrastructure and material space by buying stakes of ACC Limited and Ambuja Cements at USD 10.5 billion from Switzerland's Holcim. This has made the Adani Group the second biggest cement manufacturer. • The Adani Group's control over the power, coal, and logistics sectors has offered it a great scope of synergy with the cement business. It also has excellent scope for structural reduction in the cost of cement production. The cement cost is also greatly dependent on energy cost, logistics, and distribution costs. By leveraging the existing platforms of the Adani Group, it will be able to lower the cement manufacturing cost and offer the product at a lower price to the end user.