Acquiring Penna will reduce logistics costs for Adani Cements: CFO Vinod Baheti

Mumbai: The increased use of sea route for transportation after the purchase of Penna Cement will help reduce logistics costs for Adani Cement, Chief Financial Officer Vinod Baheti told analysts in a call. Adani Cement transports less than 2% of its cargo by sea, and this is expected to rise to 10% by 2027-28 (April-March) with access to five bulk cement terminals at Kolkata, Gopalpur, Karaikal, Kochi and Colombo through Penna Cement.

“One of the highlights of this transaction is that it gives me full strength to serve peninsular India. A lot of companies have cement, but this company has been much more visionary in terms of maritime logistics infrastructure,” Baheti said.

For goods transported by sea, this could help reduce costs by Rs 300-400 per tonne, while on an overall basis, it would lead to savings of Rs 50-70 per tonne.

Adani Cements uses sea route for some transportation at Sanghi Industries and Ambuja Cements. “The sea logistics plan will now mature after this acquisition. You will see more impressive progress on sea logistics in 6-12 months,” Baheti said.

Adani Cements earlier this week announced the acquisition of Hyderabad-based Penna Cement at an enterprise value of ₹10,422 crore. The company, formed by Ambuja Cements, ACC and Sanghi Industries, has a production capacity of around 79 million tonnes. It aims to achieve a production capacity of 96 million tonnes by the end of the current financial year and 110 million tonnes by the end of FY26.

Penna Cement has 10 million tonne capacity ready for use, while 2 million tonne capacity is under construction in both Jodhpur and Krishnapatnam. It also has surplus clinker in Rajasthan, which can be used to support the 3 million tonne grinding capacity.

“We are directly adding 17 million tonne capacity, which is about 20% of my existing capacity,” Baheti said. Adani Cements has set a target of 140 million tonne capacity by FY28. However, earlier this week, ET reported that the company has earmarked $3 billion for acquisitions as it seeks to overtake the country’s largest cement producer — UltraTech Cement — in the next 3-4 years.