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South India is becoming a hub for mergers and acquisitions in the cement industry, with UltraTech and Ambuja Cements leading the charge.
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The region has an installed capacity of 188 million tonnes per annum, with 45 players and low capacity utilization of 60-65%.
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M&A activity is driven by large players seeking to consolidate their position, gain market share, and acquire assets at reasonable prices.
The cement industry in South India is witnessing a surge in mergers and acquisitions, with UltraTech and Ambuja Cements emerging as key players. The region’s low capacity utilization and presence of numerous small players make it an attractive target for consolidation. UltraTech’s recent acquisition of India Cements is the latest in a series of deals that have taken place in the region since December.
The south Indian market offers significant opportunities for growth, with a large number of players and low capacity utilization. However, the valuation gap between buyers and sellers can be a challenge, as smaller players may have high expectations. Large players like UltraTech and Ambuja Cements are well-positioned to drive down costs and acquire assets at reasonable prices, making it challenging for smaller players to compete.
The M&A activity in the cement industry is expected to continue, with several potential targets identified in the region. As the industry consolidates, it is likely that only the most efficient players will survive, leading to a more competitive market.
