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Why Holcim acquisition - amid a host of acquisitions - is historic for Gautam Adani

Why Holcim acquisition - amid a host of acquisitions - is historic for Gautam Adani

During his speech on September 17 at the Trident in Mumbai on the occasion of the completion of Holcim, Gautam Adani said that he is often asked why he is venturing into the cement business.

Gautam Adani during the group's completion of Holcim Gautam Adani during the group's completion of Holcim

Gautam Adani called the acquisition of Holcim’s cement assets – Ambuja Cements and ACC – historic. For Adani to call it historic assumes significance, considering the group has been rapidly acquiring properties and expanding. Gautam Adani said that the acquisition of Holcim is historic for four reasons – they became the second largest cement manufacturer in India, they have two of the most “iconic” brands in the country, the acquisition is India’s largest ever inbound M&A transaction in the infrastructure and materials space and closed in a record time of four months, and that it has forayed into the business when India is at the cusp of one of the greatest economic surges. 

During his speech on September 17 at the Trident in Mumbai on the occasion of the completion of Holcim, Gautam Adani said that he is often asked why he is venturing into the cement business.  “It starts with our unshakeable belief in the India story and our conviction that India will be a 25 to 30 trillion-dollar economy by 2050. The numbers are known to all of you – while India is the second largest producer of cement in the world, our per capita consumption is just 250 kg compared to 1,600 kg of China. This is almost a 7x headroom for growth,” he said.

“It emerges from the belief that in the new emerging world order, strength will come from self-reliance or what many of us call – Atmanirbharta,” he said.

He also said that several of the government’s programmes are gathering momentum, and the long term average growth in cement demand is expected to be 1.2-1.5 times the GDP. “We anticipate growing twice this number,”  he said. Considering the investments in infrastructure and housing, “cement is an attractive adjacency”, he said. He said that the adjacency gives the conglomerate a competitive advantage, putting them in a position to gain unmatched scale. 

“And we anticipate going from the current 70 million tons capacity to 140 million tons in the next 5 years. Needless to say, a large part of my confidence comes from the combined strength of the leadership we are getting from ACC and Ambuja,” said Adani. 

He said that there are four vectors that will accelerate the nation’s development – the demographic dividend that put India on track to become a $30 trillion dollar by 2050, the growth of the nation’s middle class which will soon become the largest in the world leading to a surge in demand and consumption, the global drive for sustainability that will drive a green industrial revolution, and digitisation that will add significantly to the anticipated 8 per cent GDP growth. 

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