Philips Carbon Black has shortlisted three locations for its proposed greenfield unit which will have a 1.2 lakh tonnes annual capacity, chairman Sanjiv Goenka said.
“We are evaluating options on this and Tamil Nadu, Andhra Pradesh and Gujarat are the states shortlisted for this”, he infomred the media.
Indications are that a coast-based location, proximity to tyre manufacturing facilities and fiscal incentives that are available may influence the company’s decision on site-selection. “We do not have any unit in South India and the tyre capacities are being expanded there”, Mr Goenka observed.
Alongside, PCBL is also planning to invest ₹300 crores on a brownfield expansion at its units at Palej and Mundhra in Gujarat. Expected to be ready by fiscal 2019, this will take PCBL’s capacity to 5.6 lakh tonnes from 4.8 lakhs now. It also has one unit each in Durgapur in West Bengal and Kochi in Kerala.
PCBL ‘s capacity augmentation programmes come at a time when the tyre industry’s prospects are good . An ICRA report said that tyre demand is expected to grow by 7-8% during fiscal 2018 and fiscal 2019, boosted by higher OEM demand and stable replacement demand. Replacement demand for the truck and buses (T&B) is likely to pick up to 5 % this fiscal following the decline witnessed last year. Though demand in first quarter in 2017-18 suffered due to destocking by dealers before GST rollout, this is a short-term aberration and volumes should recover in second half of fiscal 2018.
Mr. Goenka said that PCBL has diversified into speciality applications for carbon black, whose market was earlier restricted only to certain applications, mostly in the automobile sector. “Now carbon black is being used in the printing and the paint industry “, he said adding that PCBL was planning to produce around 50,000 tonnes of this speciality carbon black against the less than 20,000 tonnes produced now. “Its contribution to profits is more”, he commented.
PCBL’s four plants recorded the highest-ever carbon black production of 383,316 tonnes in the first quarter if this fiscal with exports of 93,340 tonnes to over 30 countries. The company closed the quarter with a 33 % increase in its sales turnover at ₹637.3 crore and a 407 % increase in its net profit which touched ₹48.2 crores. Mr.Goenka attributed the results to cost optimisation, improved demand in the tyre market and development of speciality applications for the carbon black.