Ambuja Cements rivals UltraTech in limestone reserves via acquisitions

Gap in the two competitors' reserves is narrower than that in manufacturing capacities

This report has been updated 

  Even as Adani Group-controlled Ambuja Cements focused on acquisitions to rival India’s largest cement maker, UltraTech Cement, it appears to have built equally competitive limestone reserves in the last couple of years, disclosures suggest.

 

According to data shared by the two companies in their analyst presentations, as of June, Ambuja Cements had limestone reserves of eight billion tonnes, compared to UltraTech Cement’s disclosed reserves of 10 billion tonnes.

 

While UltraTech has been conservative in limestone auction bids over the past year, nearly one billion tonnes of Ambuja Cements’ current reserves were built through participation in various state auctions.

 

An email query sent to both companies remained unanswered.

 

Industry sources note that, with Adani Group stepping in as new promoters with deeper pockets, Ambuja Cements has strategically built its limestone reserves in the last two years, similar to UltraTech’s.

 

According to publicly available data, Ambuja Cements won 587 million tonnes (MT) of limestone reserves through auctions in FY24. It further added another 275 MT to its reserves in the first three months of FY25. The eight billion tonnes does not include the 83 MT (including ACC) won in an auction during the July-September period.

 

In addition to auctions, Ambuja Cements’ recent acquisitions have also boosted its limestone reserves. For instance, through its acquisition of Sanghi Industries in 2023, Ambuja Cements gained access to one billion tonnes of limestone reserves. Ambuja’s latest deal to acquire Orient Cement also adds limestone mines in Rajasthan to its portfolio.

 

Limestone is a key raw material in the cement-making process, to the extent that cement units are typically clustered around the closest source of this mineral. With all top-four cement makers planning large capacity expansions, access to corresponding limestone reserves is critical. 

 

“Cement companies are pursuing two strategies on limestone: one to secure supply for their planned expansions and the other to prepare for limestone lease expiries and higher premium costs due to the MMDR Act,” said Ravleen Sethi, director at CareEdge.

 

Some of these leases are up for expiry from 2030 onwards, which could add to costs and exacerbate access issues. Cement industry executives estimate that around 25 per cent of leases could expire at an industry level.

 

“Lease expiries and new bidding on them could expose the industry to intense competition. If the existing lessee fails to win back the mine, it may have to look for an alternative deposit, potentially resulting in higher auction premiums and freight costs per tonne,” said Sethi.

 

She added, “In the worst-case scenario, the plant may have to shut down temporarily or even permanently for want of a limestone mine lease if it loses the lease to a new player in the bidding rounds.”

 

In the FY24 limestone auctions, Ambuja Cements won the maximum number of bids, with Nuvoco Vistas Corp and JK Cement also emerging as aggressive bidders so far in the current financial year (FY25).

   

 

Rivalling Capacities	Cement Capacity	Limestone Reserves
UltraTech Cement	150.7 MTPA	10 Billion Tonnes
Ambuja Cements	89 MTPA	8.1 Billion Tonnes

  Note: Capacities for UltraTech does not include Kesoram Industries and India Cements. Capacities for Ambuja does not include Orient Cement    Source: Company dislcosures