Entering the cement business was a natural choice that complemented our plans and our fundamental beliefs about the growth prospects of India."
Dear Shareholders,
It gives me immense pleasure to write to you for the first time since ACC became part of the Adani Group.
Making the Choice
Over the past few years, I have stated numerous times about the strong position India has created for itself. Investments are a matter of belief, and I believe that the next three decades will belong to India as it makes its way to becoming a 30 trillion dollar economy by 2050. This is increasingly evident from the growth India is already witnessing. In this journey, a key catalyst for India's growth story will continue to remain the massive capital investments that will go into building infrastructure. Investment in infrastructure typically has over twice the multiplier impact as compared to tax cuts or other forms of fiscal stimulus and thereby has a larger all round development impact on society. At a very basic principle level, almost every physical infrastructure project requires cement. Therefore, entering the cement business was a natural choice that complemented our plans and our fundamental beliefs about the growth prospects of India.
Also, much of our strategic expansion objectives have almost always been based on entering adjacent spaces that complement our existing businesses. Given that cement margins have significant dependence on the cost of energy (increasingly green energy) and logistics costs, our very strong presence in both these adjacent sectors helped drive our investment decision.
Adani and the Legacy of the ACC Brand
Over the past decade, we have increasingly gravitated from being a pure B2B player to a B2B2C player that builds on much greater brand awareness. Some examples of these have been our Airports business, Electricity Distribution business, Real Estate business, Edible Oil and Foods business, and Gas Distribution business. Our entry into the cement business was yet another step towards capitalising on our market presence and building branded businesses that allow us to move closer towards the end consumer and lend greater credibility to the Adani brand name.
In this context, I must say that I have always been a big admirer of ACC’s pioneering legacy. I admire the way ACC has historically prioritised inclusive growth, trust and relationships above all. With its wide range of innovative and premium products, ACC has always raised the bar in offering low-carbon, durable, sustainable solutions, and continues to do so, enhancing its bouquet of environment-friendly, valueadded cement and concrete offerings. Leveraging synergies within the Group, we are further enhancing ACC’s competitive edge. ACC AEROMaxX and ACC ECOMaxX are the latest need-based innovations in the concrete space.
I admire the way ACC has historically prioritised inclusive growth, trust and relationships above all. With its wide range of innovative and premium products, ACC has always raised the bar in offering low-carbon, durable, sustainable solutions, and continues to do so, enhancing its bouquet of environmentfriendly, value-added cement and concrete offerings."
Today, ACC is one of the fastest-growing concrete brands in India with ACC Concrete, popularly known as RMX. This continuing legacy of the brand was recently further validated when TRA research recognised ACC among India’s “Most Trusted Cement Brands” in its 2023 Brand Trust Report.
Path Forward
The philosophy of the Adani Group has been one about growth. Our growth statistics and expansion into multiple adjacent sectors speak for themselves. In this context, we are adopting a three-pronged approach to the growth of our cement business. The first is to double our plant capacity with an emphasis on green cement. Our significant presence in the green energy business and utilisation of our fly ash, where possible, from our power generation business, aligns well with this approach. The second is to drive much greater operational efficiency to grow margins. Here again, our understanding and presence in the ports and logistics business, as well as the power generation business gives us a significant advantage. The third and final approach will see us investing in the branding and marketing strategy to take advantage of the existing legacy of the ACC brand and focus on strengthening the distributor and dealer network.
Not surprisingly, we have also embarked on an ambitious digital strategy and making investments where value, and not just volume, drive the next phase of growth. Plants that leverage digitisation and advanced analytics to enable real-time decision-making by using techniques like digital twinning, optimisation and operations research, and dynamic price discovery processes are just some of the math-based advanced techniques that we have started deploying as we build out one of the world’s most advanced industry clouds to manage our distributed cement manufacturing. We expect digitisation to be a significant multiplier to our cement growth strategy.
Also, when it comes to sustainability, cement companies have a dual challenge in the future – pushing towards a low-emission future while preventing price escalation. Investments in new capital infrastructure, Carbon Capture, Utilisation and Storage (CCUS) technologies and alternative fuel sources can enable decarbonisation but also drive up the costs. Therefore, continued innovation will be key to finding the path to sustainability in cement production. Hence, our focus will not be limited to just making greener cement but also addressing the issue of R&D, operations excellence, economies of scale, and sustainability across the entire cement supply chain.
In this context, I must compliment ACC as the first Indian Cement Company to sign the Net Zero Pledge with Science Based Targets.
Ethos help Cements Values
The ethos of a Company speaks of a Company's character, its beliefs, and its values. In the case of the Adani Group, its ethos is rooted in three core values that define our character, Courage, Trust, and Commitment. These values collectively lay the foundation of our belief in ‘Nation Building’. Courage is our ability to dream bigger – every single day, Trust is our ability to empower our employees – every single day and Commitment is our ability to deliver on our promises – every single day.
Our mission is to do our part to build the new India, just as was the dream of ACC. We further cemented this collective dream the day we made the 5000+ proud ACC employees a part of the Adani Parivar.
Regards,
Karan Adani
Chairman