AV Birla to fire up carbon black units
Group plans to invest $600 million; to ramp up capacity to 1.1 million tonnes by 2010.
By MV Ramsurya, TNN |
MUMBAI: The Aditya Birla group plans to invest $550-$600 million in ramping up its carbon black capacities in India and abroad over the next four years to meet growing demand and also increase market share in the competitive industry.
The group, which now makes close to 8 lakh tonnes through all its units, will take it up to 1.1 million tonnes by 2010, said company whole-time director Rakesh Jain. “This is what we are planning to do... it (the total capacities) may also go up if we acquire some existing plants,” he added.
The investments will be through new plants in Mexico and at Patalganga in India and also by doubling existing capacities in China and Egypt. Its units include Hi-Tech Carbon in India, Alexandria (Egypt), Thai Carbon (Thailand) and Liaoning in China.The $24 billion, Mumbai-based conglomerate, had bought the unit in China and is already the world’s largest maker at a single location through its Egypt facility.
Carbon black was primarily used by the tyre industry — about 70% of the product made is consumed by the tyre companies — has now found new applications by mechanical automotive and pigment players. Now, the tyre industry uses about 60% of the total carbon black made globally.
The group is also exploring options to combine sillica and carbon black for use in tyres, partly in response to a growing demand for cutting carbon black production considered unfriendly to the environment. “We don’t subscribe to that view,” said Mr Jain. “Carbon black is made from sludge which is the last product refined from crude oil. Sludge by itself is harmful to the environment. So, by making carbon black we are cutting on that risk,” he added.
Sillica is an alternative commodity that is being used by the tyre industry to increase longevity in tyres.
The Aditya Birla group, which earns around Rs 2,700 crore from carbon black, plans to improve its position as the world’s fourth-largest maker of carbon black and as the second-largest in India. The group, which used to supply carbon black based on requirement, has now shifted to a two-year contract with the flexibility to revise if prices of the basic raw material, crude oil, goes up. More than half of its sales come from contracts, said Mr Jain.
The group, which now makes close to 8 lakh tonnes through all its units, will take it up to 1.1 million tonnes by 2010, said company whole-time director Rakesh Jain. “This is what we are planning to do... it (the total capacities) may also go up if we acquire some existing plants,” he added.
The investments will be through new plants in Mexico and at Patalganga in India and also by doubling existing capacities in China and Egypt. Its units include Hi-Tech Carbon in India, Alexandria (Egypt), Thai Carbon (Thailand) and Liaoning in China.The $24 billion, Mumbai-based conglomerate, had bought the unit in China and is already the world’s largest maker at a single location through its Egypt facility.
Carbon black was primarily used by the tyre industry — about 70% of the product made is consumed by the tyre companies — has now found new applications by mechanical automotive and pigment players. Now, the tyre industry uses about 60% of the total carbon black made globally.
The group is also exploring options to combine sillica and carbon black for use in tyres, partly in response to a growing demand for cutting carbon black production considered unfriendly to the environment. “We don’t subscribe to that view,” said Mr Jain. “Carbon black is made from sludge which is the last product refined from crude oil. Sludge by itself is harmful to the environment. So, by making carbon black we are cutting on that risk,” he added.
Sillica is an alternative commodity that is being used by the tyre industry to increase longevity in tyres.
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The increase in capacities is also being done to enhance its marketshare as large consumers, such as tyre company Michelin, are planning to acquire carbon black manufacturing units to integrate their production process. Michelin recently said it would be looking at buying some carbon black units and that it is actively looking at options in Asia.The Aditya Birla group, which earns around Rs 2,700 crore from carbon black, plans to improve its position as the world’s fourth-largest maker of carbon black and as the second-largest in India. The group, which used to supply carbon black based on requirement, has now shifted to a two-year contract with the flexibility to revise if prices of the basic raw material, crude oil, goes up. More than half of its sales come from contracts, said Mr Jain.
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