J K Lakshmi to expand its RMC, cement business

With the industry looking to increase its supply in the coming months, J K Lakshmi Cement Ltd (JKLC) is following suit. A leading manufacturer of cement and ready mix concrete (RMC), J K Lakshmi Cement, which also manufactures Plaster of Paris, is expanding its cement and RMC business. The company plans to invest Rs 1,000 crore to expand its capacities in both arenas from 3.5 million tonnes to 12 million tonnes by the year 2012.

Presently, JKLC has seven RMC plants in Gurgaon, Noida, Manesar, Jaipur, Chandigarh and one recently commissioned in Surat. With the seventh plant, the company has forayed into Gujarat which it sees as an upcoming market for RMC.

"The RMC market is still in its nascent stage in the country and there is a lot of scope for it. All we need to do is some concept selling and create awareness among the consumers in the metros, tier-I and tier-II cities and Gujarat is one such potential market," said S Chouksey, CEO & wholetime director, J K Lakshmi Cement Ltd.

According to Chouksey, the company will be setting up four more RMC plants by the end of the present financial year and will be taking the number to 20 in the next two years. Costing around Rs 8-10 crore each, the plants will be set up at an individual capacity of 8,000-10,000 cubic metre per month. JKLC is looking to expand the capacity of both RMC and cement plants to 5 million tonnes by October 2008, said Chouksey.

On the present cement prices, Chouksey said the industry will be expanding its capacity to 100 million tonnes by next year but the new capacity will materialise only by 2008-09.

"Till the new capacity materialises, no price change is expected. Moreover, in the medium term, the prices will stabilise to an average of Rs 200. Presently, the prices are high because of a demand-supply fluctuation," he said.

Post-expansion, JKLC is expecting to have a turnover of Rs 1,000 crore in its cement business and Rs 500 crore in its RMC business by 2010. Chouksey added that the company intends to increase its market share in the next 2-3 years.

At present, JKLC holds around 9-11 per cent market share in Rajasthan and Gujarat cement markets, and 6-7 per cent share in North India. JKLC intends to capture a major share of the Rs 160-162 million huge cement market, apart from increasing its market share in RMC from current 15 per cent, said Chouksey.