ACC Limited has released its Investor Q&A, outlining growth strategies targeting 43.7 MTPA capacity by Q3 2025. The company is focusing on plant debottlenecking to unlock 5.6 MTPA capacity and leveraging Ambuja’s clinker capacities. It also plans to reduce power costs by 9% through investments in renewable energy. ACC aims for a cost target of Rs. 3,650 PMT by FY2028.
Expansion and Capacity Growth
ACC Limited is focused on increasing its production capacity. Currently at 40.4 MTPA, the ongoing expansions at Salai Banwa & Kalamboli plants are expected to boost capacity to 43.7 MTPA by Q3 2025. Additionally, plant debottlenecking initiatives are projected to unlock an additional 5.6 MTPA capacity within 24 months. ACC will also utilize Ambuja’s clinker capacities to drive double-digit volume growth.
Limestone Reserve Management
ACC is proactively addressing limestone reserve depletion by securing new blocks in locations like Wadi, Chanda, and Kymore. These efforts will ensure continued operations and improve cost efficiencies by utilizing higher quality resources. The company is also collaborating with parent company Ambuja for clinker supplies under a Material Supply Agreement (MSA).
Renewable Energy Investments
Parent company Ambuja is investing Rs. 6000 Crs to establish 1000 MW of Renewable Energy (RE) power, which includes 700 MW of solar and 300 MW of wind energy. This RE power will also supply ACC. Currently, 556 MW of power is already operational. The adoption of renewable energy has already helped reduce ACC’s power costs by 9%, from Rs. 6.54 to Rs. 5.95/kwh.
Cost Reduction Targets
ACC has achieved significant improvements in cost reduction across key areas, including raw materials, power & fuel, and freight. The company is targeting a cost of Rs. 3,650 PMT by FY2028. Operational leverage, group synergies, and synergies with the parent company are expected to contribute to further cost efficiencies.
Merger Update
ACC and Ambuja, along with other associates like Sanghi, Orient, and Penna, are working to create business synergies. The merger of Adani Cementation has been completed. The merger of M/s Sanghi and Penna has been announced and is in advanced stages of completion. Further updates on the ACC and Ambuja merger will be provided as they develop.
Balance Sheet Insights
An increase in Trade Receivables is primarily due to running bills under the MSA for cement supplies to the Parent Company, influenced by adverse seasonal factors. An increase of Rs. 240 Cr in other financial assets reflects accrued interest on an Income Tax refund. An increase of Rs. 703 Cr in other current assets is due to short-term trade advances to Ambuja and other associates for clinker and cement supplies. ACC expects The Trade Receivables will get cleared in Q3.
Capex and RMX Growth
ACC plans to finance its capital expenditures through treasury funds and internal accruals. The company’s RMX (Ready Mix Concrete) business has existing 116 plants across 45 cities and aims to expand to 365 plants by 2030, targeting a capacity of 35 Mn M³. ACC also has plans for raw material supplies with expectations for reduction of Rs. 100 / MT in cost of raw-material by 2028.
Source: BSE
