Gautam Adani’s rise to power began with his calculated approach to finding industries that would be compatible with his goals.
His friendship with the current prime minister began in the 1990s where coincidentally his journey to becoming the world’s ninth-richest person started with a port. The port brought in coal, liquified gas, and palm oil and so Adani found his calling in this alongside adjacent businesses. Adani now holds his dominance over several things like logistics, airports, grain silos, and data centers.
With such ongoing expansion, it only made more sense to make an unbridled move in the field of cement, a booming industry where Adani invested around $10.5 billion.
Here he’s faced with the roar of another great and well-established business tycoon, Kumar Mangalam Birla. The cement industry is competitive and Birla comes from old money unlike Adani, who has captured the frontiers with his calculated approach.
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Birla-controlled UltraTech Cement Ltd has announced a capital expenditure of Rs. 12,900 crore to increase its cement capacity by 22.6 million tonnes per annum. That works out to be $75 per tonne.
Adani is paying almost double that per tonne for taking over an estimated 73 million tonnes per annum capacity this year at the two Holcim units, Ambuja Cements and ACC.
Here’s a thing: If Adani will buy scale at a premium price, Birla will go ahead and build it cheap.
UltraTech’s current capacity of about 120 million tonnes per annum gives it a market share of 20%, ahead of the 12% Adani just acquired.
However, enough about the figures and numbers. The question remains whether Birla will take this new intrusion of Adani in the industry lightly or will face it with a comeback?
When two established business tycoons gamble with luck in the industry, it is surely a sight to watch. Will Adani dethrone Birla as the “King of Cement”? Only time will tell.
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This post is tagged under: Adani, ambuja, birla, birla vs adani, business, cement industry, commerce sector, ultratech cement
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