Financial Daily from THE HINDU group of publications
Wednesday, Mar 03, 2004
Financial Daily from THE HINDU group of publications Wednesday, Mar 03, 2004 |
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Corporate
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Diversification Phillips Carbon Black to get into power trading Indrani Dutta
Kolkata March 2 PHILLIPS Carbon Black (PCBL), a RPG group company, is planning to amend its memorandum of association in order get into power trading. PCBL has units in West Bengal, Kerala and Gujarat. Sources say this was part of the Rs 543-crore company's diversification plans, which would also enable it to qualify for funds flow under the clean development mechanism of the Kyoto protocol. "It has now been found that a part of the process gas generated during manufacture of carbon black can be effectively converted for sale to third parties - this gas would otherwise have to be either released in the air or incinerated", sources said. A 12 MW power plant is being set up at PCBL's unit at Baroda in Gujarat, at an investment of Rs 32 crore. The RPG group, which already has experience in the `power business' — through its flagship company CESC - has shortlisted some clients for offtake of its power. Management estimates were that about 5 MW of this output would be consumed captively with the remaining being available for sale. This initiative is projected to add Rs 15 crore to PCBL's bottomline according to sources. The plant is set to go operational by mid-2004. Similar moves are afoot at the PCBL unit at Durgapur in West Bengal also. However, the relevant clearances are yet to be received sources said. Sources said that entering into an area such as power trading is expected to insulate the company from the cyclical nature of its core business. Carbon black is a raw material for manufacturing automotive tyres. Its main raw material is carbon black feedstock - a crude oil derivative and prices of which remain volatile. Reduction in import duty of carbon black is also one of the threats being faced by the company. At the forthcoming AGM of the company later this week, shareholders nod would be sought for amending the MoA so as to carry on with " the business of generation, distribution and transmission and sale of power," sources said. Minority stakeholders' nod would also be sought for mortgaging some of PCBL's property for meeting its long term resource needs.
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