JAMMU: Jammu and Kashmir Cements Limited (JKCL), once a key player in the cement industry of the region, has been grappling with a severe decline over the past decade, leading to the complete shutdown of its operations since 2019. Between 2013-14 and 2018-19, JKCL suffered cumulative losses amounting to approximately Rs 157.58 crore, with figures reaching Rs 42.44 crore in 2018-19, Rs 16.61 crore in 2017-18, Rs 31.75 crore in 2016-17, Rs 23.59 crore in 2015-16, Rs 26.27 crore in 2014-15, and Rs 16.92 crore in 2013-14. These mounting losses rendered the company financially unviable and prompted the administration to initiate its disinvestment.
Among the major reasons for JKCL’s decline is its below-par productivity per employee ratio, which hampered efficiency and overall output. Additionally, frequent power supply disruptions significantly impacted operations, causing substantial production losses. The company also suffered from a lack of sufficient working capital and inadequate maintenance, leading to frequent breakdowns of plant and machinery.
Unforeseen circumstances further exacerbated the company’s struggles. The devastating floods of September 2014, the unrest of 2016, and the COVID-19 lockdown in 2019 had a prolonged adverse impact on JKCL’s performance. Moreover, mounting liabilities, including unpaid salaries, contractor bills, employee provident fund contributions, and pending GST payments, added to the company’s financial woes.
In light of its deteriorating financial health, the Administrative Council of the Union Territory of Jammu and Kashmir, under the chairmanship of the Lieutenant Governor, approved the complete sale of JKCL and its assets on an “as-is, where-is” basis through strategic disinvestment. This decision, formalised through Administrative Council Decision No. 113/15/2021 dated October 19, 2021, paved the way for an e-auction process for qualified bidders.
Adding to the complexities of revival efforts, the Jammu and Kashmir Pollution Control Committee (J&KPCC) imposed a moratorium on establishing new air-polluting industrial units, including cement plants, stone crushers, brick kilns, mining operations, and hot mix plants, in Khrew, Pulwama, and Khonmoh, Srinagar, for two years. A review committee on December 20, 2023, extended this moratorium indefinitely for cement plants and related industries until air quality indices improve.
Despite these challenges, some measures have been taken for the welfare of JKCL employees. The 6th Pay Commission benefits have been implemented, though the poor financial condition and ongoing disinvestment process have prevented the implementation of the 7th Pay Commission recommendations.
An analysis of JKCL’s financial statements from 2008-09 to 2019-20 highlights the company’s declining performance. While production levels fluctuated over the years, the capacity utilisation rate saw a steady decline, reaching a mere 19.37 per cent in 2019-20. The company, which had reported profits in some years, suffered heavy losses in others.
With JKCL’s disinvestment underway, the future of the company remains uncertain. The administration’s focus now is on ensuring a smooth transition, addressing employee concerns, and monitoring environmental impacts in affected industrial areas.kashmir life