Ambuja Cements to Boost Capacity by 10% by FY28
Ambuja Cements, now part of the Adani group, has announced plans to raise its production capacity by about a tenth by fiscal 2028. The move mirrors a similar expansion pace recently outlined by a larger rival, signaling renewed confidence in long-term demand for cement across India.
What the expansion involves
The planned capacity increase will be achieved through a mix of brownfield upgrades and incremental greenfield additions. The company aims to optimise existing plants and add new kilns where needed, rather than relying solely on large single-site projects. This approach should help contain capital expenditure while speeding up commissioning timelines.
Why now?
- Strong infrastructure demand: Continued government spending on roads, rail and urban projects is keeping construction activity steady.
- Residential growth: Housing and affordable homes remain key drivers of cement consumption.
- Competitive positioning: Matching competitors’ expansion moves helps protect market share and regional reach.
Market implications
A 10% capacity increase will reinforce Ambuja’s footprint in key regions and could ease supply-side constraints during peak seasons. For the broader industry, parallel expansions by major players are likely to maintain healthy competition on pricing and distribution, while also pressing smaller players to consolidate or specialise.
Risks and challenges
Execution risks include timely project completion, cost pressures on fuel and raw materials, and maintaining environmental clearances. Demand volatility—linked to slowing economic cycles or policy shifts—could affect utilisation rates after the new capacity comes online.
Outlook
By aligning its growth pace with industry peers, Ambuja is positioning itself for steady, managed expansion. If execution stays on track and demand holds, the move should strengthen the company’s market position without dramatically changing the competitive landscape.
Key takeaways:
- Ambuja plans ~10% capacity growth by FY28 via brownfield and selective greenfield projects.
- The plan matches recent expansion moves by a leading rival, reflecting confidence in long-term demand.
- Success depends on execution, raw material costs, and sustained construction activity.