JK Cement to acquire majority 60% stake in Saifco Cements to enter J&K mkt

JK Cement, one of the leading cement producers, has said it will acquire a 60 per cent stake of Saifco Cements in a deal through which it will enter into the Jammu & Kashmir market.

The JK Group firm will acquire a 60 per cent stake in Saifco Cements, which has an integrated manufacturing unit at Khunmoh in Srinagar, at a valuation of Rs 174 crore, according to a joint statement.

Saifco's integrated manufacturing unit in Srinagar is spread across 54 acres of land and has a clinker capacity of 0.26 MTPA and grinding capacity of 0.42 MTPA.

Besides, it has captive limestone reserves spread over 144.25 hectares with a total minable reserve of 129 million tonnes.

"The acquisition will help the company expand its footprint into the state of Jammu and Kashmir Region," it said.

JK Cement has a manufacturing capacity of 24.2 MTPA (million tonnes per annum) having a strong presence in markets such as Rajasthan, Uttar Pradesh, and Madhya Pradesh. Its turnover for FY24 was at Rs 86.30 crore.

JK Cement Managing Director Raghavpat Singhania said this acquisition is a significant step forward in accelerating JK Cement's growth journey.

"We are committed to ensuring a seamless and successful integration of our businesses, bringing together our combined expertise and experience. The state of J&K not only holds strategic importance but also has immense potential for infrastructural development and partnering with Saifco Cements is a step towards solid cementing goal to manufacture the best for our customers and nation."  JK Cement Joint MD and CEO Madhavkrishna Singhania said the location and rich limestone reserves of Saifco offer a unique opportunity to significantly increase our overall capacity.

"Currently, per capita cement consumption in Kashmir stands at approximately 168 kilograms, nearly 55 per cent of the national average, presenting a vast growth potential. Cement demand typically leads economic expansion by a factor of 1.2X in regions with significant infrastructural development opportunities, and Kashmir is undoubtedly one of these regions," he said.

Saifco Cements Chairman Manzoor Ahmad Guna said: "We are excited about the opportunity to work together to scale our operations and establish ourselves as the leading cement players in the Kashmir Valley. At Saifco, we take pride in our endeavour towards bringing the country's leading business houses to the valley and contribute to its growth and development through such strategic alliances. We are confident that this partnership will empower us with the expertise and resources needed to drive continued success."  The statement also added that the acquisition is subject to regulatory approvals and conditions.

For the financial year ended March 2024, JK Cement's consolidated revenue was Rs 11,701.06 crore.