Kolkata: Himadri Speciality Chemical Ltd, which manufactures coal tar pitch and carbon black, Wednesday said it would expand its production facility at Singur in West Bengal at an estimated cost of Rs1,000 crore over the next five years.
The company is looking to scale up its carbon black production at the facility. The expanded capacity, when commissioned, will generate additional revenue of Rs2,500-3,000 crore, according to chief executive officer Anurag Choudhary. The first phase of expansion will be concluded by April next year, he added.
When fully expanded, Himadri’s plant at Singur, opposite the abandoned Tata Nano small car factory on National Highway 2, will have a carbon black production capacity of 200,000 tonne per annum. The company will add 40 new high-realisation grades of carbon black to its portfolio. Carbon black is a key ingredient for the rubber industry.
The company currently produces 120,000 tonne of carbon black a year. By April next year, it will ramp up its capacity by 60,000 tonne. The first phase of expansion is estimated to cost Rs300-400 crore, according to Choudhary.
Himadri currently has an outstanding debt of around Rs734 crore, and a debt-equity ratio of 0.6. As a result of the planned capital expenditure, Himadri’s debt-equity ratio will go up to one, Choudhary said.
Himadri, which is the third largest producer of carbon black in India, has a 17% share of the market. Apart from West Bengal, Himadri has manufacturing facilities in Andhra Pradesh, Odisha, Chhattisgarh, Gujarat and China.
In India, consumption of speciality carbon black is estimated at 80,000 tonne annually. It is growing at 6.5% year-on-year. Currently, around 50% of the domestic demand for this ingredient is met by imports.