Adani cement biz to cut reliance on distributors to boost profits

The Adani Group’s cement businesses are looking to cut their reliance on distributors or wholesalers as the country’s second-largest cement maker looks to boost its profitability.

- Varun Sood

As part of a pilot project, Ambuja Cements Ltd and ACC Ltd have reduced the number of distributors from 12 to three in the south Gujarat region, which is home to half of the state’s small and medium industries and a fifth of the state’s population. Both cement firms are expected to reduce the number of distributors across the country in the coming months, according to an executive briefed on the development.

“The profitability of the distributors is more than some of the cement manufacturers," said an executive privy to the development. “This needs to change. Once you have fewer distributors, they can continue making more money on volumes, provided they aggressively seek discounts."

“Both Ambuja and ACC are very strong brands and can do even better if we build an even better engagement with retailers," said the executive.