Adani Cements will reduce logistics costs by 400% with Penna sea route network: CFO Vinod Bahety

Bombay: Adani Cements’ recent purchase of Penna Cement will help reduce logistics costs by increasing the use of sea lanes for transportation, says CFO Vinod Bahety. Currently, Adani Cements transports less than 2% of its cargo by sea, but with Penny’s five bulk cement terminals in Kolkata, Gopalpur, Karaikal, Kochi and Colombo, this is expected to increase to 10% by 2027-28.

Increase shipping by sea

Bahety emphasized that Penna Cement’s advanced maritime logistics infrastructure is a major advantage, especially when serving the Indian peninsula. “Many companies have cement, but Penny’s vision for maritime logistics stands out,” he said.

Using sea routes could reduce costs by £300-400 per tonne of cargo carried, resulting in overall savings of £50-70 per tonne.

Improved logistics plan

Adani Cements already uses sea routes at Sanghi Industries and Ambuja Cements, but Bahety expects to significantly improve its sea logistics strategy in the 6-12 months after the acquisition.

Takeover details

Earlier this week, Adani Cements acquired Hyderabad-based Penna Cement for ₹ 10,422 crore. This acquisition, which includes Ambuja Cements, ACC and Sanghi Industries, increases Adani Cements’ production capacity to nearly 79 million tonnes. The company aims to increase this to 96 million tonnes by the end of the current fiscal year and to 110 million tonnes by FY26.

Immediate increase in performance

Penna Cement is adding 10 million tonnes of ready capacity, with an additional 2 million tonnes under construction in both Jodhpur and Krishnapatnam. Rajasthan’s clinker surplus provides a grinding capacity of 3 million tonnes.

Bahety mentioned, “We are immediately increasing production capacity by 17 million tons, which is almost 20% of our existing production capacity.” Adani Cements targets 140 million tonnes by FY28. ET recently reported that Adani Cements has earmarked $3 billion for acquisitions as it looks to overtake UltraTech Cement as India’s largest cement maker in the next 3-4 years.