--- Ambuja Cement acquires a 56.74% stake in Sanghi Industries, with a Rs 5,000 crore deal.
--- Ambuja plans on increasing its cement capacity from 6.1 MT to 10 MT by March 2023. Adani said that this will entail a move of ~Rs 500 crore.
-> 6.1 MMTPA Cement Production Capacity
-> 6.6 MMTPA Clinker Production Capacity
-> Access to limestone reserves of ~1 Bn. MT
-> Estimated Cost Savings: The current deal size is ~$ 99 EV/ton but potential to ramp up the capacity with minimal capex by de-bottlenecking operations ~Rs. 500 Cr. This will revalue the deal size at ~$ 66 EV/ton, however, financials point to ~84 EV/ton of current capacity.
- Value Enhancement: The potential synergies from the acquisition may lead to improved financial performance, potentially boosting shareholder value over time.
- Increased Competition: Competing cement manufacturers could face heightened competition from Ambuja Cement with enhanced capacity and cost-efficiency.
- Pricing Pressure: Prospective increases in production capacity could result in competitive pricing strategies thereby warranting competitors to adjust their costing/pricing models to stay in the race.
Country: India 🇮🇳
Company: Sanghi Industries Limited
Cost Element: Plant and Machinery
Cost Classification: CWIP + Fixed Assets
Source: August 3, 2023 | ETNOW |
Reach us if you have any concerns regarding cost management accounting issues in your organization.
Partner, Chandra Wadhwa & Co. (Cost Accountants) | B.Com, FCMA, ACA, DISA | Certified SAP-CO Consultant | Executive Program on Management and Finance (IIM, Ahmedabad)
Address: 1305 & 1306, Vijaya Building, 17, Barakhamba Road, New Delhi - 110001, India Mail: firstname.lastname@example.org
Tel: +91-8800018190, +91-7503703599.