Three southern states are in the race for hosting the greenfield carbon black project of Philips Carbon Black Ltd., a part of the RP Sanjiv Goenka Group. Indications are that Telangana is emerging as the favourite vis-a-vis the two other shortlisted States, Tamil Nadu and Andhra Pradesh.
“While we prefer a coastal location, Telangana has made a very good offer,” group chairman Sanjiv Goenka said at a press meet to announce PCBL’s half-yearly results. “We do not have any unit in south India,” he said, adding that the group owned some 120 acres in Ennore, Tamil Nadu.
Indications are that Gujarat, earlier among the sites under consideration, had been edged out. Mr. Goenka declined to comment on the likely investment for the proposed 1.2 lakh tonne unit.
Expansion plans
It usually requires an investment of about ₹600 crore for a similar carbon black unit.
Mr. Goenka said PCBL was exploring options on a capital issue to finance this unit. A mix of debt and internal accruals may also be used to fund the project. Factors such as proximity to a port, user industries such as automobile units and fiscal incentives would help decide the location “within a couple of months,” according to Mr. Goenka. PCBL is also planning to invest ₹300 crore on brownfield expansion at its units at Palej and Mundra in Gujarat. Expected to be ready by fiscal 2019, the expansion will take PCBL’s capacity to 5.6 lakh tonnes from 4.8 lakh now.
It also has one unit each in Durgapur, West Bengal, and Kochi, Kerala. PCBL recorded a 96% capacity utilisation during the second quarter boosting profitability. Net profit increased fourfold to ₹50.8 crore from ₹12.5 crore a year earlier.
“This was possible due to increased turnover and higher capacity utilisation,” he said. Revenue rose 17% to ₹601.2 crore. He also said that PCBL would increase production of the high-value speciality carbon black which has rubber and non-rubber applications.