Global Economy:
The global economy appears poised for a gradual recovery from the
powerful blows of the pandemic and of Russia - Ukraine war. Commodity prices that rose
sharply due to war have moderated, but the war continues, and geopolitical tensions are
high. Infectious COVID-19 strains caused widespread outbreaks last year, but economies
that were hit hard—most notably China—appear to be recovering, easing
supply-chain disruptions. GDP growth to fall from 3.4 percent in 2022 to 2.8 percent in
2023. Advanced economies are expected to see an especially pronounced growth slowdown,
from 2.7 percent in 2022 to 1.3 percent in 2023. In case of Emerging and Developing
Economies, economic prospects are on average stronger than for advanced economies, but
these prospects vary more widely across regions. On average, growth is expected to be 3.9
percent in 2023 and to rise to 4.2 percent in 2024. The global economy is yet again at a
highly uncertain moment, with the cumulative effects of the past three years of adverse
shocks—manifesting in unforeseen ways. Spurred by pent-up demand, lingering supply
disruptions and commodity price spikes, inflation reached multi decade highs last year in
many economies, leading central banks to tighten aggressively to bring it back toward
their targets and keep inflation expectations anchored.
India growth remained robust in the face of global uncertainty but it
is expected to face some headwinds due to the stubborn inflationary pressure. GDP growth
of
India for 2023-24 would likely to be 5.9%.
India Economic Growth:
India is on track to becoming a $7 trillion economy by 2030 powered by
the triple engines of rapid growth, clean energy transition and digital revolution. This
would mean India doubling its economy in seven years from the existing gross domestic
product (GDP) of $3.5 trillion.
Factors like demographic dividend and domestic consumption have often
been cited as the engines of Indias economic growth. Indias economic growth
over the past two decades has been the second fastest amongst major countries, at an
average of 7.5% per annum, only behind Chinas 9.6% growth.
India Cement Industry:
India Cement Industry is passing through consolidation phase where
small players are gradually acquired by major players. Further, entry of Adani in Cement
Industry through acquisition of ACC & Amubja has changed the market dynamics. Now all
players including mid-size players are planning for capacity addition through
greenfield/brownfield expansion and or by acquisition.
Cement Industry to add another 130-140 MTPA of capacity during fiscal
2024-2028. In fiscal 2023, Cement industry added around 30 MTPA of capacity and robust
capacity addition of 30-32 MTPA is expected in fiscal 2024 also due to positive demand
outlook and players efforts to maintain market share in a competitive market
scenario. The total installed capacity is estimated to be around 730-740 MTPA by fiscal
2028 with a demand growth of 4.5-5.5% CAGR.
The cement demand grew by a healthy 11-12 % in fiscal 2023 resulting in
cement consumption of 395 million tonnes. With higher cement demand growth and GDP
moderating to less than ~7% in fiscal 2023, cement-demand-to-GDP ratio improved sharply to
~1.6 times.
However, we expect it to moderate in fiscal 2024 to 1.2-1.4 times on
back of moderation in GDP growth and demand growth on high base of last fiscal.
In fiscal 24, demand is expected to witness 7-9% growth primarily led
by the governments thrust to boost Infra and rural housing before the Lok Sabha
election in 2024.
Cement Demand Drivers:
The Cement demand mainly comprises of housing (58-60%), infrastructure
(26-28%), and industrial/commercial (13-15%) segments. The real estate and urban housing
demand shot up post pandemic due to WFH environment. The housing demand is expected to
moderate over the next five years (fiscals 2024 to 2028), on a high base but will remain
major contributor backed by a lower concretization rate in the country (which means high
potential for cement demand growth), real estate pick-up, the central governments
focus on the ‘Housing for All scheme, and sustained from individual house
builders (IHBs). Hence, the housing segment is expected to remain the bedrock of cement
demand in India. Even as housing will be the key volume contributor, infrastructure growth
which has nearly doubled from 11-13% in 2013 to 26-28% in 2023 will further expand its
share in the next with the Central Government focusing on infrastructure spending through
its flagship schemes, such as PM Gati
Shakti, and rising investments in roads, railways, metros, airports,
and irrigation. The central governments thrust on infrastructure with a plethora of
projects in the National
Infrastructure Pipeline and the state governments efforts to
increase capex will drive healthy infrastructure-led demand growth in the medium term. On
the other hand, the share of the industrial and commercial segment is expected to remain
stable at 12-14% in fiscal 2028.
Recent government initiatives, such as the PLI scheme and Atmanirbhar
Bharat, focus on multimodal logistics and rising capex owing to a long-term positive
demand outlook are expected to support demand from the industrial segment.
Sustainable Journey towards Achieving Net Zero Emission by 2050:
JK Cement is at the forefront of our Sustainability journey. Our
progress is on the right speed to achieve our alignment with Cement Sectors SDG Goals and
our commitment to Science-Based Target initiatives (SBTi). The Company has pledged for
UNFCCC Race to Zero campaign under the egis of GCCA for becoming Net-Zero by 2050, and
also submitted UNs Energy Compact with the Ministry of New and Renewable Energy with
a target to increase the green energy share from 19% in the base year 2020 to 75% in 2030.
five years, Reducing GHG Emissions
JK Cement Limited has aligned with the climate science to
decarbonization across the value chain and committed for SBTi with a deep cut of carbon
emissions by 21.7% till FY2030 from FY2020. In the last three years, we have reduced GHG
Emissions by 16.9% to 565 from base level of 680 kgCO2/t cementitious (Scope-1&2)
To meet these commitments, we are working on various levers which are
Improving energy efficiency, Green Power, Circular Economy, Clinker Factor/Blended Cement,
Biodiversity as Carbon Sink and water positivity.
1. Improvement in Energy Efficiency
To improve the energy the old four-stage preheater with a modern 5
stage preheater, replaced old grinding systems with modern energy efficient VRM by
Horizontal Roller press, replacement of water-cooled compressor with air-cooled screw
compressors and process optimization, implemented fully mechanised material handling
systems, commissioned fully mechanized high-speed Over Land Belt Conveyor from mine to
plant to avoid road transportation and implemented
EVs for employee commuting, modified coolers in Kilns.
2. Transition Towards Green Energy
Our Green Power consumption in FY2020 was 19% which has been increased
to the tune of 44% by FY2023. The 2030 ambition in the sustainable roadmap journey is to
achieve 75% of Green Power share (WHRS + RE). The Company is accelerating investment in
green power technologies like WHRS and REs.
3. Circular Economy (Use of Alternative Fuel and Raw Materials)
All of our cement kilns are outfitted with cutting-edge pre-processing
and calciner feeding of a wide range of liquid and solid waste materials. We boosted our
TSR from 6% in FY2020 to 13.95% in FY2023, with the goal of reaching 35% by FY2030, and we
are growing our capacity correspondingly.
Moreover, as part of conservation of natural resources we have reduced
the clinker factor by consuming the industrial waste such as fly ash and slag etc.
4. Water footprint
We are constantly working to achieve our aim of becoming 5 times water
positive till 2030 from 3.2 times in FY 2020. Our water stewardship journey involves
continuously enhancing our water use efficiency, shifting from ground to surface water
sources and increase the ground water recharge to make more water available to society
where we operate.
We have increased our water positivity from 3.2 times in FY2020 to 4.5
times in by implementing the best water saving practices and conservation technologies in
the sector.
5. Biodiversity Footprint and Sustainable Mining
JK Cement believes that to build a greener tomorrow Hence, JKCL is
developing a biodiversity park as a secure habitat for local flora and fauna where native
species are preserved. We are committed to protect the existing biodiversity and also to
create the right habitat in urban areas to ensure that it flourishes.
We planted around 13.5 lakh trees till FY2023 and maintaining 39%
greenery at our operational sites.
We implemented best sustainable mining practices and our mines have
been recognized and awarded for 5 star rated mines. We follow GCCA guidelines to implement
the biodiversity across all the sites, and developing biodiversity park and Miyawaki
forestation at many sites.
6. Net Zero aspiration
We are looking for replacement of fossil fuel by adopting the emerging
technologies to replace fossil fuel with sustainable green fuel, transition towards green
energy and techno-economical solutions such as gasification of RDF, Oxyfuel technology,
CCUS, use of H2 as green fuel, Electrification of Kiln, Clean fuel based fleet in mining
and all transportation and green sustainable Cement Products.
Performance India Operations:
Industry margins were impacted in fiscal 2023 mainly due to increase in
Power & Fuel costs during first half of fiscal led by rally in crude oil and Petcoke
&
Imported Coal prices due to geopolitical tensions between Russia and
Ukraine. Cement prices rose by 3-4% on-year in fiscal cushion profitability amidst high
cost pressures.
Companys Operational & Financial Performance:
Standalone
1) Grey Cement, White Cement & Wall Putty sales volumes increased
to 15.1 MnTpa as against 13.6 MnTpa in 2021-22 thereby registering growth of 11%.
2) Revenue from Operations grew by 17% to H8998.59 crores from H
7678.58 crores in previous year.
3) EBITDA recorded de-growth of 12 % at H1346.47 Crores from H1536.08
crores in 2021-22
4) Net profit is lower at H562.54 crores as against H630.68 crores in
2021-22, recorded decline of 11 %.
Capacity addition
1) Central India Expansion in subsidiary
4 MTPA capacity expansion in Panna / Hamirpur was completed within 18
months in third quarter of the 60% capacity utilisation in last quarter.
2) Existing units
Capacity of existing units have been increased by 2 MTPA by various
modifications carried out for improvement in Clinker quality, Cement Mill throughput,
feeding systems and loading capabilities.
With this Grey Cement capacity is increased to 20.7 MTPA.
Paint Foray:
Acquired Acro Paints Ltd. having manufacturing facilities in Bhiwadi.
It is a profitable & debt free
Company producing decorative paints including textures and construction
chemicals catering to the markets of northern India. Cost of acquisition is H255 crores
and further Capital expenditure of H30 crores is being done to upgrade the capacity to
60,000 KL.
Information Technology:
Digital being the core of business, your Company is highly focussed on
leveraging technology to optimize business benefits, along with a robust IT infrastructure
and best in class Security practices.
Some of the major investments in Technology during the financial year
2022-23 include :
Applications
1. Capturing condition monitoring of equipment on real time basis (Walk
by Inspection) their mobile.
2. Institutionalized in-plant logistics solution using RFID including
Smart loading – all units for both Outbound as well as Inbound
3. Automated Quality testing and integration with SAP using eLIMS
4. Digital EHS solution across all Units (Safety Plans, Dashboards and
Reports, ePermits, etc.)
5. Contractor Labour Management
6. Travel and Expense Management using SAP CONCUR
7. AI/ML based predictive Engine for select plant modules
Information Security
1. Replaced Legacy Anti-virus solution with latest End Point Detection and Response
solution (EDR), and XDR for Servers and Network, providing smart layer of security from
Malware & Exploits. .Ithasalsoramped up to the level of
2. AI based Email Security including CES (Cloud Email Security), APP (Advanced Phishing
protection) and Cloud Mail Defence
3. Web applications protection using Cloud based WAF
4. Secure IT and OT integration across all plants.
5. Introduction of Good security practices to safeguard Data within the system
6. Safeguarding Cloud base Applications and Data through SWG & CASB.
7. Centrally managed Patch management and compliances
Infrastructure & Manpower
1. Leaner workforce at Digital & IT – focus on best in class solution through
more innovation and alignment with business.
2. Seamless connectivity to internal users through Centralised, AI based Wi-Fi across
all.
3. DR setup with optimized RPO and RTO.
4. Centralised Backup solution @ JKCL for all users
The direction for next steps are carefully planned and the work has
been initiated for taking the Digitalization at JKCL to next level, including
Implementation of SAP S/4 HANA, Application Centralization using Low Code Now Code
platform, Further, strengthening the Security, and increased usage of emerging
technologies.
Internal Audit Function:
Internal Controls
The internal control systems are commensurate with the size, scale and
complexity of the operations of the Company.
The systems, standard operating procedures and controls are implemented
by the executive leadership team and are reviewed by the internal audit team whose
findings and recommendations are placed before the
Audit Committee.
The Internal Audit team monitors and evaluates the efficacy and
adequacy of internal control systems in the Company, its compliance with operating
systems, accounting procedures and policies at all locations of the Company. Based on the
report of internal audit function, process owners undertake corrective action(s) in their
respective area(s) and thereby strengthen the controls.
Significant audit observations and corrective action(s) thereon are
presented to the Audit Committee.
The Audit Committee reviews the reports submitted by the Internal
Auditors in each of its meeting.
Internal Financial Controls
The Company has an IFC Framework, commensurate with size, scale and
complexity of its operations. The framework has been designed to provide reasonable
assurance with respect to reporting and providing reliable financial and operational
information complying with applicable laws, safeguarding assets from unauthorized use,
execution of transaction with appropriate authorization and ensuring compliance with
polices of the Company.
The Company has documented Risk and Control Matrices
(RACM) covering all significant risks and all controls are tested for
design and operating effectiveness as part of its Internal Financial Control reporting
framework.
The Company uses SAP - a well-accepted enterprise resource planning
(ERP) system to record data for accounting, consolidation, and management information
purposes and connects to different locations for exchange of information
In our view, the Internal Financial Controls are adequate and are in
line with best practices applicable to organizations of a similar size, nature and
complexity.
The Company has continued its efforts to align all its processes and
controls with best practices.
Risk Management
A robust governance structure has been developed across the
Organization. Risk Management framework developed which identifies and assesses strategic,
operational, financial and compliance risks and monitors the effectiveness and efficiency
of risk mitigation and control measures. The major risks identified by the businesses and
functions are systematically addressed through mitigating actions on a continual basis.
The responsibility of tracking and monitoring the key risks of the
division periodically and implementing suitable mitigation plans proactively is with the
senior executives of various functional units. These risk owners are expected to avoid any
undue deviations or adverse events and ultimately help in creating value for the business.
During the year, the Company undertook multiple initiatives to
strengthen, widen and deepen the scope and coverage of the risk framework across the
Company.
Human Resources Development:
Building a Future-Ready Organization
Human Capital has undergone a significant transformation in recent
years, largely influenced by the disruptive impact of COVID–19. In this context,
organizations are confronted with unprecedented challenges, including a highly competitive
talent landscape, the future of work and the need for cost control. As we enter 2023, we
see an opportunity for HR to redefine the employee value proposition in the post-pandemic
reality. Human capital management has taken centre stage, to address these immediate
challenges, where there is a renewed emphasis on its employees. This has led to
transformations in key areas such as; Employee benefits, well-being initiatives,
Diversity and Inclusion, digital transformation, talent development and
organizational culture.
At JK Cement, our commitment to our employees is evident through our
industry-leading employee welfare practices and collaborative work culture. As a
fundamental principle, we prioritize employee engagement and retention. To achieve this,
we have successfully implemented robust systems to understand and proactively address
employee feedback. This ensures that employees and managers have structured feedback
opportunities available throughout the year.
To retain employees and check attrition, independent feedback on the
reason of employee leaving us. This is done through an exhaustive interview methodology by
external experts.
Additionally, we prioritize creating a consistent and enjoyable
onboarding experience for new employees by providing a standard joining kit and conducting
induction sessions to familiarise them with our business goals and organizational culture.
A Great Place To Be …
We are truly invested in our people and as a testimony to our
camaraderie and culture, we were recognized as a "Great Place to Work" for
the 4th year in a row. This recognition has further strengthened our
commitment to providing a positive and fulfilling work environment for all our employees.
As we have redesigned our people strategy and adapted to the dynamic
trends in the industry, lets delve into the major developments, flagship
interventions, and cultural transformations that have shaped the way we work at JK Cement.
Talent Acquisition and Managment:
At JK Cement, we have embraced new ways of virtual hiring, strengthened
our young talent pipeline for Management Trainees (MT) and Graduate Engineer Trainees
(GET), built an internal talent pool, and increased our focus on gender diversity. Our
efforts to attract diverse talent have resulted in sustaining 113 women employees across
various functions, accounting for 3.5% of our total workforce. Continuing on our patch
towards leveraging technology, we launched our first Digital Orientation program,
‘JUMPSTART, as part of our flagship onboarding program.
We effectively manage a diverse talent pool through various initiatives
that prioritize employee well-being and professional growth. These include providing a
nurturing environment, offering benchmarked compensation, enabling merit-based career
progression and implementing best-in-class people policies. We have prioritized digital
transformation and employee experience as our core pillars of impact. By leveraging modern
technology, we have strived to understand employees unique needs and have simplified
processes by digitalization of our HR systems leading to greater efficiency and
transparency across locations.
Additionally, we implemented initiatives to identify our Employee Value
Proposition (EVP) and took a detailed survey. Through This survey we identified our EVP
statement as "Jazbaat se Banaa Junoon se Juda".
Our continuous focus on industry benchmarking aims to position JK
Cement as an employer of choice. We conducted focused interventions on productivity
analysis, salary benchmarking, and incorporating external trends to strengthen our people
strategy. Furthermore, we celebrated our inaugural ‘Foundation Day – Samman,
honoring long-serving employees and channel partners.
Learning and Development:
We continuously prioritize building capabilities and developing talent
to meet evolving skill and competency needs. Our Learning and Development function has
significantly increased overall training man-days. We also invested in the development of
our managers and leaders by participating Management Development Programs (MDPs) and
Leadership Development Programs (LDPs) from prestigious institutes.
Through a structure methodology of organisation temperature check by
various surveys during lifecycle of employee we have been able to develop a competitive
workforce, fostered innovation, and driven organizational success thereby building a
pipeline of future leaders.
At JK Cement, we remain dedicated to making our brand an "Employer
of choice", both internally and externally. Our employees are our most valuable
assets, and we will continue to attract, engage, and develop a future-ready workforce for
our organization.
The total workforce (standalone) as on 31st March 2023 is
3767.
+91-9892691696
