Himadri Speciality Chemical will invest ₹1,000 crore over five years to expand its carbon black business.

Plans are afoot to set up new carbon black lines in its existing integrated plant at Mahistikry in West Bengal for producing specialty carbon black.

According to Anurag Choudhary, CEO, the company, which currently has a capacity of producing 1.2 lakh tonne of carbon black a year, will be adding 2 lakh tonne capacity in the next five years.

“We will be investing close to ₹300-400 crore (out of the ₹1,000-crore) in the first phase to add close to 60,000 tonne capacity. Commercial production (from this expansion) is likely by April 2019,” Choudhary said at a press conference here on Wednesday.

The investment will primarily be by way of internal accruals, he said.

The company plans to introduce close to 40 new grades of carbon black and expects to clock additional revenue of ₹2,500-3,000 crore from the new product lines once it is fully operational.

Growing demand

The specialty grades of carbon black find application in racing tyre, moulded rubber goods, wires, cables and fibres.

Globally, the demand for specialty carbon has been growing at a CAGR of 3 per cent, while the domestic demand is close to 80,000 tonne and growing at a CAGR of over 6 per cent. Nearly 50 per cent of the domestic demand is currently met through imports, he said.

Once the entire 2 lakh tonne goes on-stream Himadri will be in a position to cater to nearly 70 per cent of the domestic demand.

The company will also look at exporting close to 80 per cent of its production to North America, Europe, Asia and West Asia.

The company is expecting to clock ₹2,200 crore of revenue in the current fiscal, almost 50 per cent higher than ₹1,471 crore in FY-17.