Buoyed by its acquisition of the US-based CII Carbon LLC on the weekend, which makes it the world’s largest producer of calcined petroleum coke (CPC), a key input in aluminium production, India’s Rain Calcining Ltd now plans a calcining kiln in China at a cost of $50 million (Rs200 crore).
“We want to set up a kiln with a capacity of 300,000 tonnes in China, which we consider a strategic market for CPC. We have already identified a local joint venture partner there,” Rain’s managing director N. Jagan Mohan Reddy said. The construction of the Chinese project will begin next year and production will start in 2010.
Reddy said the Chinese venture would focus on exports and was being set up in China given the good availability of raw material ‘green coke’. Petroleum coke is a manufactured carbon product produced at a limited number of oil refineries. Coke, as it is removed from the coking process, is referred to as green coke. Green coke contains about 15-20% residual hydrocarbon materials. CPC is the end product that results from heating green coke to get rid of moisture and other volatiles.
The CII buy will give Rain access to abundant raw material availability since the target has long-term pacts with several refineries for green coke for the next 10 years.
Reddy estimated a demand of 300,000 tonnes calcining kiln capacity every year from 2009 given the growth of global aluminium smelting industry. Apart from Alcoa Inc.’s plans to set up an aluminium smelter in Iceland and Emal’s plant in Abu Dhabi, smelting plants are coming up in Qatar, Oman and South Africa, among others.
The global green coke production at present is estimated at around 80 million tonnes, of which up to a quarter can be used for CPC production. Rain, which operates two kilns in Visakhapatnam, has over 2.4 million tonnes per annum capacity of CPC production together with CII Carbon’s facilities in Illinois, Louisiana, Mississippi and West Virginia in the US.
Shares of Rain Calcining shot up nearly 20% to end at Rs42.50 each on the Bombay Stock Exchange on Monday, even as the Sensexshed 0.51%.