Himadri Speciality mulls investing ₹628 crore for brownfield expansion

Kolkata-based integrated specialty carbon company, Himadri Speciality Chemical Ltd, is looking to invest ₹628 crore for brownfield expansion of its carbon black and advance carbon material units in West Bengal.

According to Anurag Choudhary, CEO, Himadri Speciality, the details regarding the proportion of debt and equity for the capital expenditure would be finalised within a month.

The estimated investment for scaling up its carbon black unit by 30,000 tonnes a year to 1.5 lakh tonne would be close to ₹148 crore. The remaining ₹480 crore (out of ₹628 crore) would go towards 20,000 tonnes a year capacity addition at its advance carbon material unit.

Its existing advance carbon plant at Falta at South 24 Parganas in West Bengal has a production capacity of 600 tonne a year.

“The demand for advance carbon has been growing at a CAGR of close to 35 per cent; while that for carbon black at 6-7 per cent,” Choudhary told BusinessLine, explaining the rationale behind the expansion.

The expansion of both the units would take anywhere between 18 and 24 months.

According to Utkarsh Nopany, Senior Manager, CARE Ratings, there has been hardly any capacity addition in the carbon black industry in the last 3-4 years. Hence, when the demand started picking up in the last 1-2 years, the capacity utilisation of most companies operating in the segment improved.

Himadri’s advance carbon finds applications in the manufacture of lithium-ion batteries which are used across portable electronic devices as well as hybrid and electric vehicles.

“While the volume production of advance carbon is still small, its value contribution is significantly higher. Any amount of capacity addition would help boost the company’s profitability,” Nopany said.

The company is also in the process of scaling up its coal tar distillation capacity by 25 per cent to 5 lakh tonnes a year through debottlenecking of its existing facility at a cost of ₹15-20 crore. The capacity would come onstream by the end of FY18, Choudhary said.

The company, which is one of the largest coal tar pitch manufacturers, caters to nearly two third of the demand of the graphite and aluminium industries in the country.

The company posted close to 23 per cent growth in revenues to ₹468 crore for the quarter ended September 30.

The growth in topline came on the back of volume growth of close to 12 per cent and value growth of 15-20 per cent, Choudhary said.

Net profit jumped by 168 per cent to ₹51 crore (₹19 crore) during the period under review.

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