JK Group, founded in 1918, as a Conglomerate of businesses, has around $4 billion (Rs 32,000 Crore) annual revenue in FY2023. They are into cement, auto motive, auto component, tyre, argi seeds, dairy, financial services, and paper industries. The company has around 40,000 employees as on 2023. JK Group is the 3rd largest business conglomerate in India after Tata Group and Birla Group. It has operations in around 100 Countries such as India, Mexico, Romania, Switzerland, Belgium, Portugal, etc. across the world. It has around 46 manufacturing facilities across India. Its sales network comprises 10,000 distributers and retailers. This specific case study describes the growth strategies, and innovative approaches of JK Group in order to distinguish itself from its competitors.
JK Cement Strategy: In 2016, JK Cement was investing around Rs 1,700 crore to set up a new cement manufacturing facility in Chhattisgarh; and also to reopen a closed unit. Between 2016 and 2019, JK Cement converted their legacy Strategic Business Units (SBUs) into digitized business functions. As on 2019, JK Cement is one among the largest cement manufacturers with five manufacturing facilities in the country with annual production capacity of 10 million tons of cement. By 2019, they digitized the core business functions such as sales, supply chain, logistics, and manufacturing functions. The sales function has implemented SAP, CRM systems in their operations. Logistics function deployed RFID and GPS technologies. Also JK Cement started using drones, Internet of Things, surveys and Geospatial mapping of the mines in order to maintain the quality of the cement they produce. As on 2019, They are using technologies in selection of the sourcing material such as limestone sources/mines.
JK Tyres Strategy: In 2016 April, JK Tyres acquired another tyre and tube manufacturer Cavendish Industries for around Rs 2,195 crore. This acquisition has added more than 1.2 million radial tyres to JK Tyres capacity. The acquisition has enabled JK Group to enter into two-wheeler, three-wheeler markets; and also strengthened its capacity in bus and truck tyre market. JK Group was open to further acquisitions in Southeast Asian and African markets. As on April 2023, JK Tyres’s another innovation includes development of Passenger Car Radial (PCR) Tyres using Recycled and Renewable material. They used innovative materials to manufacture tyres such as natural rubber, recycled rubber power, steel wire, bio-attributed SBR and BR, recovered carbonaceous black, bio-based oil, and recycled polyester. JK Tyres fulfilling its energy needs with renewable energy sources. They want to become the greenest company and energy efficient company in the world. By 2050, JK Tyres would like to become Carbon Neutral Company.
JK Paper Strategy: In 2016, JK Group planned to acquire two Avanta Group firm BILT Graphic paper manufacturing plants as part of their growth strategy. JK Paper was having capacity of 4.5 Million tonnes of Paper capacity with its Odisha and Gujarat plants. As on June 2023, JK Paper has set a goal of becoming Net Zero Emission Company By 2040. They were taking measures to reduce emissions and to deal with pollution efficiently. According to JP Paper, in the last decade, Indian forests have grown by 2%, which is useful for the paper industry. The philosophy behind paper industry is we should plant more tree than what we require for the industry. Also JP Paper took measures to replace plastic glasses and thermocol glasses with paper cups. Other Innovations by JP Paper include Paper Bags instead of plastic bags, Paper Straw instead of plastic straw, and introduced paper sticks for ear buds purpose. JK Paper made the 70% of energy they consume for paper production into green energy and reduced coal usage to 30%; in order to reduce carbon emissions. By 2040, they want to reduce carbon emissions by net zero. As on November 2022, JK Paper was to acquire two packaging companies such as Horizon Packs Private Ltd and Securipax Packaging Pvt Ltd for Rs 578 crore; this acquisition makes JP Paper to be the largest Corrugated Packaging Player. This acquisition also strengthens the Customers, Vendors, Employees and Partners of the Acquired units with JK Papers manufacturing capabilities.
JK Fennar Strategy: As on July 8, 2022, JK Fennar Partnered with IIT Madras to Manufacture Bio-Degradable Alternatives to Rubber Products. They were also doing research to substitute synthetic materials with natural fibers such as Cotton and hemp. JK Fennar-IIT Madras Partnership was part of JK Groups CSR (Corporate Social Responsibility) initiative. This partnership would like to develop next generation bio-degradable and environmental friendly rubber as part of the sustainable future.
Other Sectors: JK Group Other businesses include JK Agri Genetics, JK Seeds in agricultural sector. JK Group is also into financial services, and diary industries. As a tiny conglomerate all its businesses are contributing to the growth of the group fulfilling their portfolio strategy. As on 2015, JK Group has acquired a small electronics firm known as DELOPT as part of its defense and aerospace portfolio as well.
Thus, JK Group with annual revenues of $4 billion is into several sectors of the economy such as agriculture, manufacturing industry and also into services (financial services, technology). They have presence in all the major sectors of the economy; making it the 3rd largest business conglomerate in India.
Thank You. Hope this is Useful.
Dr.Goparaju Purna Sudhakar
References:
- Autocar Pro (2023), “JK Tyre Develops PCR tyre with 80% recycled and renewable material”, Autocar Professional, April 25, 2023.
- Haritas, B. (2019), “How JK Cement Transformed Critical Business Functions through Tech”, Economic Times CIO, September 6, 2019.
- Kaushik, V. (2022), “IIT Madras, JK Fennar Collaborate to Develop Bio-degradable Alternatives to Rubber Products”, Careers 360, July 08, 2022.
- Mukherjee, S. (2016), “JK Group Eyes Buyouts to Double Revenue by 2020”, Economic Times Auto, September 21, 2016.
- Mukherjee, S. (2022), “JK Tyres aims to Become Carbon Neutral by 2050”, The Economic Times, December 29, 2022.
- Outlook India (2023), “JK Paper Aims to Become Net Zero Emission Company by 2040, Says A S Mehta”, Outlook India, June 2023.
- Singh, S (2022), “JK Paper to Acquire Two Packaging Manufacturers for Rs 578 crore”, CNBC TV18, November 22, 2022.
- www.Jkorg.in