JK Lakshmi Cement Expands Capacity to Boost Market Share
JK Lakshmi Cement Ltd is taking significant steps to strengthen its market position in India, particularly in the North, West, and East regions. As the cement industry faces aggressive expansion by larger competitors, this family-owned company is investing ₹3,000 crore to expand its capacity from 18 million tonnes to 22.6 million tonnes by FY28.
The focus of this expansion is not just to increase size but to maintain relevance in a competitive market. Arun Shukla, president and director of JK Lakshmi Cement, emphasized that the company aims to protect its existing market share while selectively seeking growth in familiar regions.
Currently, JK Lakshmi operates at a capacity utilization of 73%, which is higher than the industry average of 70%. This robust utilization is essential as the company experiences peak demand months, where utilization can exceed 90-95%. To meet this demand, expanding capacity is crucial to avoid losing market share during busy periods.
The planned expansion will incorporate a new clinker unit and grinding facilities in Durg, Chhattisgarh, along with three additional split-grinding units in surrounding markets. The strategy will be funded through a mix of 70% debt and 30% internal accruals, ensuring the company maintains a manageable debt level.
In the current context, the Indian cement industry is witnessing a surge in capacity additions. Major players like UltraTech and the Adani Group have also announced significant expansions. However, despite rising utilization rates in recent years, a wave of new projects may impact future pricing power, as industry utilization is expected to remain below 70% through FY28.
In addition to capacity expansion, JK Lakshmi is focusing on premium products, which currently account for 13-14% of its revenue. The company anticipates this figure will rise to around 16% in the medium term, driven by demand for higher-strength and lower-carbon products. However, analysts warn that such premiumization may not lead to higher margins due to competitive pressures.
Overall, JK Lakshmi Cement's strategy is clear: to be a formidable player in its targeted regions while adapting to the evolving market landscape and increasing demand for premium offerings. The company is optimistic about achieving double-digit volume growth in FY26, outpacing the industry average, thanks to ongoing infrastructure spending and stable housing demand.
