Jk Cement Research Report
Indian Institute of Management, Bangalore
PGP Program
Term 1, 2012
Final Report for JK Cements – Group 2
Section 1
Business Description:
JK Cements is one of the largest cement manufacturers in Northern India and the eighth largest overall
India with net cement sales of 2545 crores in 2011-12. Itsmain productsinclude grey and white cement. It produced 53.2 lakh tons of grey cement and 3.77 lakh tons of white cement in the financial year 201112.Grey cement produced consists of Ordinary Portland Cement (“OPC”) and Portland Pozzolana Cement
(“PPC”). Their cement products are marketed under the brand names J.K. Cement and Sarvashaktiman for OPC products, J.K. Super for PPC products and J.K. White and Camel for white cement products. JK
Wall Putty and JK Water proof are its white cement based value-added products.
Housing (74%), infrastructure (17%), commercial & institutional sector (13%) and industrial sector (6%) are the major customers of the cement industry [Refer Figure 1]. Housing constitutes a major chunk of the demand and hence rural and urban housing projects are a key resource generator.
Key stock statistics and revenue/earnings data is included in the appendix [Refer Tables 1& 2]
Section 2
Market Profile, Competition, Strategy, Risks
A. Market Profile:
The demand for cement mainly depends on the level of development and the rate of growth of the economy. The major demand drivers for the cement sector in India are housing, infrastructure and commercial construction. These are key components of the country’s GDP and hence, the average growth of the cement industry is approximately 1.2 times the GDP growth. Significant impetus to both rural and urban housing as per capita income increases in a major driver of the industry. With the increase in national infrastructure investment, the industry is poised to expand further in spite of the worldwide economic recession.
The housing sector contributes around 64% of the total cement
PGP Program
Term 1, 2012
Final Report for JK Cements – Group 2
Section 1
Business Description:
JK Cements is one of the largest cement manufacturers in Northern India and the eighth largest overall
India with net cement sales of 2545 crores in 2011-12. Itsmain productsinclude grey and white cement. It produced 53.2 lakh tons of grey cement and 3.77 lakh tons of white cement in the financial year 201112.Grey cement produced consists of Ordinary Portland Cement (“OPC”) and Portland Pozzolana Cement
(“PPC”). Their cement products are marketed under the brand names J.K. Cement and Sarvashaktiman for OPC products, J.K. Super for PPC products and J.K. White and Camel for white cement products. JK
Wall Putty and JK Water proof are its white cement based value-added products.
Housing (74%), infrastructure (17%), commercial & institutional sector (13%) and industrial sector (6%) are the major customers of the cement industry [Refer Figure 1]. Housing constitutes a major chunk of the demand and hence rural and urban housing projects are a key resource generator.
Key stock statistics and revenue/earnings data is included in the appendix [Refer Tables 1& 2]
Section 2
Market Profile, Competition, Strategy, Risks
A. Market Profile:
The demand for cement mainly depends on the level of development and the rate of growth of the economy. The major demand drivers for the cement sector in India are housing, infrastructure and commercial construction. These are key components of the country’s GDP and hence, the average growth of the cement industry is approximately 1.2 times the GDP growth. Significant impetus to both rural and urban housing as per capita income increases in a major driver of the industry. With the increase in national infrastructure investment, the industry is poised to expand further in spite of the worldwide economic recession.
The housing sector contributes around 64% of the total cement
References: Crisil. (n.d.). Retrieved August 21, 2012, from Crisil Web site: crisilresearch.com - Dion Insight. (n.d.). Retrieved August 21, 2012, from Dion Insight Web site: https://insight.dionglobal.in/Insight/Industry.asp?pageLink=IndProfile&Ind=151 Gupta, N. (n.d.). Ernst & Young. Retrieved August 21, 2012, from Ernst & Young Web site: India Brand Equity Foundation. (n.d.). Retrieved August 21, 2012, from India Brand Equity Foundation Web site: http://www.ibef.org/industry/cement.aspx