After scripting a turnaround and becoming profitable, RP-Sanjiv Goenka Group owned Phillips Carbon Black Ltd (PCBL) will invest ₹200 crores towards capacity expansion over the next two years.
Focus will be on increasing business from the speciality black segment.
According to Kaushik Roy, Managing Director, the Company will look at 20-25 per cent increase in its capacity to nearly 5,00,000 tonne p.a from the existing 4,10,000 tonne p.a.
Considered to be the seventh largest carbon black maker in the world and the largest in India, PCBL currently has four state-of-the art plants at Palej, Mundra (Gujarat), Durgapur (West Bengal), and Kochi (Kerala). Investments will mostly be through internal resources and bank loans.
“We have increased the capacity utilization of our plants to 90-95 percent, which was 70 percent. The demand scenario looks good and so we will look at brownfield expansion across all the units over the next two years,” he said.
Exports to Europe, South-East Asia and the US account for 30 percent of the Company’s turnover. This number may move up once the capex plans materialize.
As Roy points out the second phase may see the Company opt for acquisitions across Eastern and Central European nations.
“Immediately there are no acquisition plans on the table. But, we may explore them at the right time,” he said.
PCBL will also look to increase the share of Specialty Black offerings.
Typically, carbon black finds its use in rubber-related products with car tyre makers being the biggest customers.
While rubber and related industries account for nearly 90 percent of PCBL’s order books, the remaining 10 percent come from industries that use Specialty Black. Specialty Black finds its usage in plastic, paints and coatings.
Meanwhile, the Company has declared an interim dividend of 60 per cent or ₹6 per equity share of face value ₹10.
For FY-16, it had declared a final dividend of 25 per cent or ₹2.50 per equity share of face value ₹10