Ambuja Cement - Optimistic About its Future

Sarika Anand Sarika Anand
Dec 08, 2020 8 min read
Ambuja Cement - Optimistic About its Future

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by the organization it is based on.

Ambuja Cements Ltd. (ACL) is one of the leading cement manufacturing companies in India and commenced cement production in 1986. Initially called Gujarat Ambuja Cements Ltd, the Company later became Ambuja Cements Ltd.

ACL enjoys a reputation of being one of the most efficient cement manufacturers in the world. Its environment protection measures are considered to be on par with the finest in the country. It is also one of the most profitable and innovative cement companies in India.

Ambuja Cement - Company Highlights

Startup Name Ambuja Cements Limited
Headquarters Mumbai, Maharashtra, India
Industry Cement
Parent LafargeHolcim
Founded 1983
Founders Narotam Sekhsaria, Suresh Neotia
CEO Neeraj Akhoury
Website www.ambujacement.com

Ambuja Cement - About and How it Works?
Ambuja Cement - Logo and its Meaning
Ambuja Cement - Founder and History
Ambuja Cement - Mission
Ambuja Cement - Partnership
Ambuja Cement - Joint Ventures
Ambuja Cement - Subsidiaries
Ambuja Cement - Business Model
Ambuja Cement - Revenue and Growth
Ambuja Cement - Merger with ACC
Ambuja Cement - Competitors
Ambuja Cement - Challenges Faced
Ambuja Cement - Future Plans
Ambuja Cement - FAQs

Ambuja Cement - About and How it Works?

Ambuja Cements Limited is an India-based holding company, which is engaged in the manufacture of clinkers and cement. The Company operates through Cement and cement related products segment. Initially called Gujarat Ambuja Cements Ltd, the Company later became Ambuja Cements Ltd. The Company has a range of products for the business to business and retail markets.

The Company's product, Ambuja Plus Roof Special, is suited for constructing roofs and slabs. It also offers install rooftop rainwater harvesting technology. Its products also include Ambuja Powercem, which caters the ready-mix (RMX) sector; Ambuja Railcem, which is designed for railways, and Ambuja Buildcem, which serves the requirements of the mass housing segment.

The Company also co-owns two brands in micro materials' category. These include Alccofine, which includes a range of micro slag materials, and Dirk Pozzocrete, which includes superfine fly ash. Alccofine Micro Materials are used in construction projects, such as metro rail, dams, roads, flyovers, bridges and tunnels.

Ambuja Cement - Logo and its Meaning

Ambuja Cement Ltd.'s logo consists of a man holding a building by its foundation which implies how the strong base of cement holds the whole building together.

Ambuja Cement Ltd.'s Logo
Ambuja Cement Ltd.'s Logo

Ambuja Cement - Founder and History

Ambuja Cement was founded in 1983 by Narotam Sekhsaria and Suresh Neotia, two traders with very little knowledge of cement or manufacturing. What made up for this lack was their far-sightedness: Anticipating that cement would be a critical resource for a developing economy like India, they invested in a state-of-the-art cement plant in Gujarat and went on to build a trusted cement brand that has become synonymous with quality and strength.

ACL has grown manifold over the past decade. Its current cement capacity is 27.25 million tonnes. The Company has 5 integrated cement manufacturing plants and 8 cement grinding units across the country. ACL enjoys a reputation of being one of the most efficient cement manufacturers in the world. Its environment protection measures are considered to be on par with the finest in the country. It is also one of the most profitable and innovative cement companies in India.

ACL is the first Indian cement manufacturer to build a captive port with three terminals along the country's western coastline to facilitate timely, cost-effective and environmentally cleaner shipments of bulk cement to its customers. The Company has its own fleet of ships. ACL has also pioneered the development of the multiple, bio-mass, co-fired technology for generating greener power in its captive plants.

Ambuja Cement - Mission

Ambuja Cement's mission statement says, "To be the most sustainable and competitive company in our industry."

Ambuja Cement - Partnership

The company has entered into a strategic partnership with Holcim, the second-largest cement manufacturer in the world from 2006. Holcim had, in January, bought a 14.8 percent promoters' stake in the GACL for INR 21.4 billion. Currently, Holcim holds 61.62% of shares in Ambuja Cements.

Ambuja Cement - Joint Ventures

  • Counto Microfine Products Private Limited
  • Wardha Valley Coal Field Private Limited
  • OneIndia BSC Private Limited

Ambuja Cement - Subsidiaries

  • Kakinada Cements Limited, India
  • M.G.T. Cements Private Limited, India
  • Chemical Limes Mundwa Private Limited, India
  • Dang Cement Industries Private Limited, Nepal
  • Dirk India Private Limited, India
  • Cement Sustainability Initiative (CSI) of World Business Council for Sustainable Development (WBCSD)
  • Indian Business Biodiversity Initiative (IBBI)
  • Leaders for Nature (LfN) India
  • The Global Compact Network India Ambuja is a member of the following industry associations: G4-16
  • Confederation of Indian Industry (CII)
  • Federation of Indian Chambers of Commerce and Industry (FICCI)
  • The Associated Chambers of Commerce and Industry of India (ASSOCHAM)
  • Bombay Management Association (BMA)
  • Indian Merchants’ Chamber (IMC)
  • Bombay Chamber of Commerce and Industry (BCCI)

Ambuja Cement - Business Model

The Company operates through Cement and Cement related products segment. The Company has a range of products for the business to business and retail markets. The Company's product, Ambuja Plus Roof Special, is suited for constructing roofs and slabs. It also offers install rooftop rainwater harvesting technology. Its products also include Ambuja Powercem, which caters the ready-mix (RMX) sector; Ambuja Railcem, which is designed for railways, and Ambuja Buildcem, which serves the requirements of the mass housing segment.

Ambuja Cement - Revenue and Growth

On a standalone basis, Ambuja Cements, part of Swiss firm LafargeHolcim, reported an increase of 87.77 per cent in net profit at Rs 440.53 crore as against Rs 234.61 crore in the year-ago period. Revenue from operations was Rs 2,852.46 crore, up 8.63 per cent as compared to the year-ago period.

Revenue from operations was up 1.51 per cent at Rs 6,169.47 crore during the quarter as compared to Rs 6,077.29 crore in July-September a year ago. Total expenses were at Rs 5,144.38 crore, down from Rs 5,400.94 crore a year ago. The consolidated results of Ambuja Cements also include the financial performance of its step-down firm ACC.


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Ambuja Cement - Merger with ACC

Two of India's marquee cement companies, ACC and Ambuja, have been part of the same global cement group for a long time. The markets were also rife with speculation about the complete merger of ACC and Ambuja for a very long time now. Finally, that seems to be seeing the light of day. In early May 2017, both ACC and Ambuja independently announced that they will consider a possible merger.

Globally, one of the biggest mergers in the cement industry was between Holcim and Lafarge which created the world’s largest cement company in the world, Lafarge Holcim. Interestingly, this company is the holding company for ACC and Ambuja Cements in India.

While both the companies have appointed the expert teams to evaluate the merger proposal, there is still no clarity on the timing of the merger or even the likely swap ratio between the two companies. Since both are fairly large companies in India, the merger will come under the scrutiny of the Competition Commission of India (CCI).

ACC's Neeraj Akhoury replaced Bimlendra Jha who resigned as the MD and CEO of Ambuja Cements.

Ambuja Cements proposed to buy out Holcim’s stake in ACC in 2013 after the global merger between Lafarge and Holcim. It forecast synergies of Rs 780-900 crore per annum. But in February 2018, the Indian units of LafargeHolcim put the merger on hold citing constraints in implementation. They then agreed to supply clinker and raw materials such as fuel, fly ash, slag and gypsum and spare parts at a discounted rate to each other. Now, according to Ambit Capital, Akhoury’s appointment paves the way for a potential long-pending merger between the two companies.

Ambuja Cement - Competitors

Top Competitors of Ambuja Cement are Aditya Birla's Ultratech, ACC, The India Cements Ltd, Dalmia, Holcim, AkzoNobel, JK Lakshmi, and Shree Cement.

Ambuja Cement - Challenges Faced

The growth in the industry has slowed down since 2019. ACC Ltd. and Ambuja Cements Ltd.—which are subsidiaries of Europe’s largest maker of construction material LafargeHolcim—said in their annual reports that the Indian cement industry’s growth, which was 9 percent in 2018, fell down to 7-8 percent in 2019.

The company flagged ongoing capacity expansion—which has led to an imbalance in total installed capacity against capacity utilization—as material risk for the cement industry.

The cement companies’ operating cash flows declined to five-year lows in 2018. While ACC’s(Ambuja Cement's Top Competitor) cash flow fell 28 percent, that of Ambuja Cements’ dropped by 68 percent. Their operating cash flows stand at Rs 1,118 crore and Rs 596 crore, respectively.

In 2020, the coronavirus pandemic also caused a lot of harm to the growth of the company.

"The company is seeking necessary permissions/approvals from the relevant government authorities for resumption of operations at various locations, in a phased manner," said a spokesperson for Ambuja Cement.

The company is taking steps to adhere to the standard operating procedure for social distancing mandated by the government in the guidelines.


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Ambuja Cement - Future Plans

The Sustainable Development Ambition 2030 provides a broad framework for the company’s strategies to meet the challenges in four broad thematic areas: Climate, Circular Economy, Water & Nature, and People & Communities. The 2030 Plan envisions a construction sector which will be innovative, climate neutral and circular in its use of resources. It will be respectful of water and nature, and inclusive – thus enhancing the quality of life.

"The company is optimistic about its future despite the COVID-19 situation. The recent initiatives by the government will help resurgence of rural demand and infrastructure projects, including affordable housing," said a spokesperson for Ambuja Cement.

Ambuja Cement - FAQs

What is Ambuja Cement grade?

Ambuja Cement OPC 53 Grade, Packaging Type: Bag

Who is the CEO of Ambuja Cement?

Neeraj Akhoury is the current CEO of Ambuja Cement.

How does Ambuja Cement make money?

The Company operates through Cement and cement related products segment.

Who's the top competitor of Ambuja Cement?

Ambuja Cement Ltd's Top Competitor is UltraTech Cement Ltd.

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