War over cement: Aditya Birla group's UltraTech makes big move to see off Adani challenge
India Today
Aditya Birla Group's UltraTech Cement is expanding capacities after Adani Group acquired Holcim AG's cement businesses in India.
Aditya Birla Group's UltraTech Cement said it would spend $1.66 billion to increase its annual capacity as the largest Indian cement maker looks to stave off competition from the sector's newest entrant, Adani Group, according to a Reuters report.
The development came after Gautam Adani-led Adani Group acquired Holcim AG's cement businesses in India for $10.5 billion.
The funds will be used to build new facilities and expand plants, which would drive up the annual capacity by 22.6 million tonnes, the company said on Thursday. Commercial production from the facilities is expected to start by fiscal 2025.
"This investment is backed by a strong conviction on India's growth potential as well as a deep and nuanced understanding of the market dynamics of the cement industry," Kumar Mangalam Birla, chairman of the Aditya Birla Group, said in a statement.
Currently, UltraTech Cement boasts a capacity of 120 million tonnes per year. Ambuja and ACC, acquired by Adani, combined have the capacity to produce at least 70 million tonnes of cement annually.
After the expansion announced on Thursday, UltraTech expects to have a capacity of 159.25 million tonnes per annum - more than double that of the Adani Group.
Under the deal, Adani Group would pay $6.4 billion in cash to acquire Switzerland-based Holcim's 63.1 per cent stake in Ambuja Cements Ltd and 54.5 per cent holding in ACC Ltd, Holcim said in a statement. The rest of the companies' shares would be bought via an open offer, Adani had said in a separate statement.
