JK Cement Acquires 60% Stake in Saifco Cements
JK Cement Ltd. is one of India's leading grey cement manufacturers and a major player in the building materials industry, which has just announced a strategic joint venture with Saifco Cements Pvt. Ltd. This cement brand is a prominent one in the Kashmir Valley. According to the agreement, JK Cement will take a 60% stake in Saifco Cements for a consideration of INR 174 Crore against the overall valuation of the company at INR 290 Crore.
This acquisition is a significant step for JK Cement in expanding its presence in one of India's fastest-growing regions, further strengthening its footprint in Northern India. The deal is in line with the government's focus on boosting infrastructure growth in Jammu and Kashmir, accelerating the region's developmental journey.
Dr. Raghavpat Singhania, Managing Director of JK Cement Ltd., expressed his enthusiasm about the acquisition, highlighting the importance of Jammu & Kashmir in the company’s growth strategy. “Known for its rich culture and resilience, Jammu & Kashmir holds a special meaning for us. This acquisition is a pivotal step in accelerating JK Cement’s growth trajectory. We are committed to ensuring a smooth integration of our businesses, leveraging our combined expertise to deliver the best products for our customers and for the nation", Dr. Singhania stated.
Saifco Cements, which has a strong manufacturing presence in the Kashmir Valley, operates an integrated manufacturing unit at Khunmoh in Srinagar. The complex covers an area of 54 acres and has a clinker handling capacity of 0.26 MTPA, and a grinding capacity of 0. Correspondingly, the company has substantial limestone reserves spread over 144.25 hectares, with a total minable reserve of 129 million tons, which it will require to continue meeting the cement requirements in the region.
This will help us build a substantial presence in Jammu & Kashmir. The site and the enormous limestone reserves that Saifco offers give us a one-of-a-kind opportunity to significantly boost our overall production capacity." - Madhavkrishna Singhania, Joint Managing Director and CEO, JK Cement Ltd. Currently, per capita cement consumption in Kashmir is about 168 kilograms, nearly 55% of the national average so there is vast growth potential", said Madhavkrishna Singhania.
He also mentioned that cement demand in a region usually precedes economic growth by a factor of 1.2x in regions where there are large opportunities for infrastructural development. The growth in infrastructure and the government's efforts in Kashmir are expected to mirror this trend. "This acquisition unlocks enormous growth potential and presents an opportunity to contribute to the development of the region", he added.
The Jammu & Kashmir government has been actively working on several projects and initiatives aimed at improving the region's infrastructure, which will further increase demand for cement in the coming years. The joint venture will focus on ramping up production capacity by utilizing Saifco's limestone reserves to meet the projected demand for cement in the next five years.
Mr. Manzoor Ahmad Guna, Chairman of Saifco Cements Pvt. Ltd., welcomed the collaboration and expressed optimism about the future of the partnership. “We are thrilled to join hands with JK Cement, a company deeply committed to the nation’s growth. This partnership gives us the opportunity to scale our operations and establish ourselves as one of the leading cement players in the Kashmir Valley. We are thrilled to partner with our Strategic Alliance for growth and development of the region", Mr. Guna said.
This acquisition will enable JK Cement to further consolidate its position as the leading player in the Indian cement industry, along with addressing the infrastructure needs of Jammu & Kashmir. It reflects the continued focus of the company on strategic expansion and its commitment to contributing to the growth of the region through enhanced production capacity, superior product offerings, and industry leadership expertise.
