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JK Lakshmi Cement Ltd.

BSE: 500380 Sector: Industrials
NSE: JKLAKSHMI ISIN Code: INE786A01032
BSE LIVE 15:49 | 23 Aug 415.75 3.35
(0.81%)
OPEN

413.50

HIGH

418.00

LOW

413.40

NSE 15:59 | 23 Aug 416.85 4.40
(1.07%)
OPEN

413.95

HIGH

419.50

LOW

413.10

OPEN 413.50
PREVIOUS CLOSE 412.40
VOLUME 3876
52-Week high 535.00
52-Week low 326.75
P/E 59.91
Mkt Cap.(Rs cr) 4,893
Buy Price 415.75
Buy Qty 55.00
Sell Price 0.00
Sell Qty 0.00
OPEN 413.50
CLOSE 412.40
VOLUME 3876
52-Week high 535.00
52-Week low 326.75
P/E 59.91
Mkt Cap.(Rs cr) 4,893
Buy Price 415.75
Buy Qty 55.00
Sell Price 0.00
Sell Qty 0.00

JK Lakshmi Cement Ltd. (JKLAKSHMI) - Chairman Speech

Company chairman speech

By the time you will be reading this message to the stakeholders of JK Lakshmi Cementthe monsoon would have sufficiently progressed all over the country. Much of the economyas well of the industry's hopes are pinned on a good above normal monsoon after twosuccessive years of drought which has seen large parts of the country battling severewater scarcity adversely impacting construction and agriculture both. A good monsoon willprovide the necessary triggerforthe nation and econo my to take off on the path ofsustained growth.

Atmorethan 7% rate of annual GDPgrowth India is already amongst the fastest growinglarge (more than a trillion $) economy in the world. Inflation rates are under control andso are the consumer as well as wholesale prices. Government priority projects such asHousing for All Smart Cities Inter-linking of Rivers AMRUT Swacch Bharat developmentof inland water ways for transportation highway&port development etc. are stepsinright direction.

As of now your company is well on its way to complete all major growth related capitalinvestments as planned by end of FY 201 7. Integrated cement plant at Durg startedcommercial production in FY 2016 and has reached almost full capacity utilisation in lessthan a year. The 1.35 Million Tonnes PA grinding unit at Surat Gujarat has just beencommissioned towards the end of FY 201 6 and is in the process of stabilisation. Anothermajor capital expenditure at our subsidiary Udaipur Cement Works Ltd. at Udaipur is wellprogressing and shall be operational in this year. With the completion of these majorprojects and with some small investments to enhance productivity in other locations ourpresent growth journey involving a total capital investment of almost Rs. 3000 Croresshall be completed. It shall take the combined cement capacity at all locations to almostabove 13 Million Tons PA. It is going to be a new milestone for all of us and Icongratulate and thank all my colleagues for bringing your company in this elite league.

In last few years the growth in demand has been subdued and the pace of new capacityadditions has also slowed down. Yet at the aggregate level the industry capacities arestill 25% - 30% more than the demand as of now. In the short run such excess capacitieshave created pressure on prices and have eroded the margins across the industry includingthat of your company. At the same time it has also challenged the industry to consolidatecut costs improve efficiencies be more productive innovate and learn to get goingagainst all odds. Your company has already been doing well on all of these fronts; eventhough the financial results of FY-16 do not reflect its true potential due to subduedmarket conditions which have prevailed in most parts of the markets in which we operate.Additionally the company has to bear the increased financial costs associated with a newGreenfield capacity and the pangs of stabilisation for a new plant.

Due to conditions as mentioned above the year has seen a number of consolidations andmergers taking place in the industry. I feel consolidation is good for such highlyfragmented industry and we will see more of this in coming years. Your company hasstrategically chosen path of organic growth and I am surethiswill stand usingood stead intimes to come.

It is now time for us to consolidate and plug the gaps if there are any in ourstrategies; which are largely centered around further improving operational efficienciesand creating more value for our customers through innovation and embracing latesttechnologies. Time has come now to reap the benefits of the seeds of growth that yourcompany has painstakingly sown in last few years and extract full benefits to optimizemaximum returns for our stakeholders and prepare ourselves for the next phase of quantumgrowth.

Returning back from where I began my message a good monsoon is expected to reviverural demand for housing as well as demand in urban centers and create more jobs. TheIndian economy which is already growing at 7-8% PA could reach even higher growth rate andsustain the momentum for next few years. As India rises and is being recognised globally;your company too is on the path of marching ahead to be amongstthe best in the industry.With this leap of faith in ourfuture I thankall my stakeholders fortheir continuedsupport.

VICE CHAIRMAN & MANAGING DIRECTOR'S MESSAGE

The year gone-by could very well be counted as one amongst the most challenging yearsthe industry has faced in nearly one decade especially so in the company's operatingspace.

For the major part of the year the industry witnessed either stagnant or at bestsluggish demand growth. It was only In the fourth quarter when the demand began to lookup. The adverse supply demand situation had its impact on the cement prices andconsequently on the profitability.

Your company which has shown its resilience and ability to rise to the occasion in thepast took these adverse situation as an opportunity to further enhance its overallcapabilities and after three difficult consecutive quarters it bounced back by thefourth.

Team JKLC worked relentlessly in the areas of cost reduction rapid optimization of thenew capacities and bringing in new products to shore up its brand positioning further. Asa result of these measures company could achieve an impressive growth of 23% in itsvolumes and could achieve almost 100% capacity utilisation of the Phase I of itsGreenfield project at Durg in fourth quarter of the very first complete year of theoperation. It is a matter of satisfaction that company has been able to reach a decentmarket share in its home markets in a short span of time based on the quality of itsproducts service levels and innovative marketing techniques.

Company's efforts were not just confined only to the newer markets which it enteredlast year consequent to commissioning of its Greenfield capacity in Chhattisgarh it madefurther progress even in its existing markets through bringing in newer products and newerinitiatives of consumer connect. In these markets too company could curtail its logisticcosts and better its market share in the profitable segments.

Be it the success in the operational spheres or in its branding efforts or in adoptionof latest IT tools I ascribe these to the commitment and dedicated involvement of people.I am a strong believer in people their capabilities and their motivation to accomplisheven seemingly very difficult goals. The company therefore continues to lay strongemphasis on the development of its human resource irrespective of the situation on theground. Your company also continues to equally lay considerable focus on the developmentand upliftment of the eco system where we operate. Its social responsibility initiativeshave yielded significant benefits to the society nearby and company continues to tread thepath.

I continue to be greatly optimistic that the growth oriented programs & policies ofthe government in general and more specifically in the areas of infrastructure housingagriculture water supply & sanitation urban development etc. would all lead toquantum growth in cement demand. The industry has sufficient capacity to meet the surge inthe demand arising out of the increasing momentum in these activities. Company'sexpansions too have been timed to meet the possible burgeoning of demand. We in factwould not be shying away from creating further capacities in a short span of time if theneeds of the nation so demands.

I thank all our stakeholders and especially our team members our customers ourvendors our distribution channel partners etc.-all our people for their continued faithin us.