Srinagar, Nov 11: The disinvestment of Jammu and Kashmir Cements Limited (JKCL) has been put on hold as the newly elected government has decided to review the project.
Deputy Chief Minister Surinder Kumar Choudhary told The Kashmir Monitor that the government will review all the projects including JKCL disinvestment. “We will come up with a decision soon,” he said.
Sources said that the Deputy Chief Minister asked the Industries Department to put the divestment proposal on hold during a review presentation held at the Civil Secretariat in Srinagar last week.
JKCL, once a market leader in Jammu and Kashmir due to the government’s preference for local cement in state infrastructure projects, possesses valuable assets, including active mining leases and a substantial land bank. While the company’s financial health has deteriorated, market experts believe JKCL could still be profitable if operated with strong management and strategic oversight. The government’s review will consider the potential for restructuring or other solutions to unlock the company’s value.
The Union Territory administration in October 2022 approved the disinvestment of JKCL due to the company’s prolonged financial struggles.
The decision followed after the Administrative Council had given in-principle approval for the complete sale of JKCL by exploring the option of ascending e-auction and authorization to utilize 240 kanals of land adjacent to Khrew Plant at Industrial Estate.
This disinvestment was necessitated as the company was not able to sustain and manage its finances properly and maintain efficiencies of operations.
Two years down the line, no successful bidding of JKCL could happen, which has now prompted the newly elected government to completely review the project.
Official sources said that many private players expressed interest in acquiring JKCL as they saw it as hugely viable considering its active mining leases and massive land bank. “The sale did not go through, as prospective buyers were reluctant to meet the high valuation sought by the government.”
The government had set the conditions including the interested bidder should have a minimum net-worth of Rs 250 crore. The bidder should have a net positive EBITDA in at least three out of the immediately preceding five financial years.
As per the Department of Industries and Commerce’s Request for Proposal(RFP) for Disinvestment of JKCL, the eligible entities were permitted to form a consortium to participate in the transaction. The maximum number of members, including the lead member, can be four. Key principles and actions underlying the recommended disinvestment modality include 100 percent ownership in JKCL in favor of a private company/consortium, he said.
KCL was established in 1975 under the Companies Act, 1956 as a government-owned entity with an authorized capital of Rs 60 crore. The company was created to capitalize on the rich limestone deposits in the Khrew belt for cement manufacturing and sales. Its operations began with the commissioning of its first integrated plant at Khrew, Pulwama, with a capacity of 600 TPD in 1982.
In 2010, KCL expanded by commissioning a second integrated plant at Khrew, Pulwama, with the same capacity of 600 TPD, followed by the commissioning of a 300 TPD grinding unit at Samba, Jammu, in 2015.
