JK Corp said on Friday that, the Company is in the final leg of its restructuring exercise. JK Corp is hiving off its financial investments into a separate company to become a pure cement company, rechristened as JK Lakshmi Cement Ltd.
A multi-business entity with interests in strawboard, paper, cement, polyester fibre, audio magnetic tapes, and others, JK Corp initiated the restructuring exercise in the year 2000 in its drive to establish different businesses into strong and focused entities. The demerger of the financial holdings division would complete this restructuring exercise and reflect its positioning as a pure cement company.
"As the company’s businesses grew in size it was deemed appropriate to hive off the businesses into strong and focused entities. Consequent to this restructuring exercise the paper division was merged with another group company, Central Paper Mills, to form JK Paper. The interests of JK Corp Ltd has been mainly cement along with a financial holdings company, which is now being demerged into a separate company to complete the restructuring as a cement-focused company," said Vinita Singhania, Managing Director, JK Corp.
The restructuring has enabled the company to focus on its cement business achieving significant growth. The company has already undertaken a Rs. 40 crore capacity enhancement and cost reduction project. It has already completed its first phase of this project ahead of schedule raising its capacity from 2. 7mn ton to a level of 3mn ton. The second phase of this project would be completed by middle of next year which would further enhance its capacity to 3.3mn ton.
The Company has been consistently improving its performance, last year with a turn over of Rs5.92bn ( an increase of 28% over the previous on an annualized basis). Its Profit after Tax is Rs260.5mn as against a loss of Rs315.8mn over the previous year (Rs21.05 on annualized basis). Even in the first quarter, viz. April-June 2005 it maintained the tempo of its growth with a turnover of Rs1.51bn (corresponding to Rs1.46bn in the first quarter of the previous year) and its Profit after Tax was Rs118.9mn crore as against Rs96.1mn in the corresponding quarter of the previous year.
"The restructuring will enable ’Lakshmi Cement’ to emerge as a more strengthened cement company with renewed focus on manufacturing and marketing cement. We are glad that the market has responded very favourably and the future holds much promise," Mrs Singhania added.