Mumbai: The recent purchase of Penna Cement by Adani Cements is set to reduce logistics costs significantly, according to the company’s Chief Financial Officer, Vinod Bahety. The deal will enable Adani Cements to use the sea route more effectively for transporting cement, which is expected to cut transportation costs.
Currently, Adani Cements uses the sea route for less than 2% of its shipments. However, with the acquisition of Penna Cement, which has five bulk cement terminals located in Kolkata, Gopalpur, Karaikal, Kochi, and Colombo, this figure is projected to increase to 10% by the financial year 2027-28 (April-March).
Benefits of the Acquisition
“This acquisition enhances our ability to serve peninsular India and benefits from Penna Cement’s advanced sea logistics infrastructure,” Bahety stated. Using the sea route can reduce transport costs by ₹300-400 per tonne for shipments through the sea, and by ₹50-70 per tonne overall.
Adani Cements, which already uses the sea route for some of its transportation through its units at Sanghi Industries and Ambuja Cements, anticipates a more robust sea logistics strategy following the acquisition. “In the next 6-12 months, we expect significant progress in our sea logistics capabilities,” Bahety added.
Details of the Acquisition
Earlier this week, Adani Cements announced the acquisition of Hyderabad-based Penna Cement for ₹10,422 crore. Adani Cements, which includes Ambuja Cements, ACC, and Sanghi Industries, has a production capacity of nearly 79 million tonnes. The company aims to increase its capacity to 96 million tonnes by the end of this fiscal year and to 110 million tonnes by the end of FY26.
Penna Cement adds 10 million tonnes of immediate capacity and has 2 million tonnes under construction each in Jodhpur and Krishnapatnam. It also has surplus clinker in Rajasthan that can support an additional 3 million tonnes of grinding capacity. “This acquisition boosts our capacity by about 17 million tonnes, which is nearly 20% of our current capacity,” Bahety said. Adani Cements aims to reach a capacity of 140 million tonnes by FY28. The company has also set aside $3 billion for further acquisitions as it strives to surpass UltraTech Cement, the largest cement producer in India, within the next 3-4 years.
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