Himadri Chemicals and Industries Ltd, which is demerging its carbon black unit into a wholly owned subsidiary, plans to take the new arm global.
Himadri Chemicals and Industries Ltd, which is demerging its carbon black unit into a wholly owned subsidiary, plans to take the new arm global.
The carbon-based chemicals maker is conducting a feasibility study for setting up capacities in Egypt or similar strategically located geographies that can serve the developed markets of Europe.
“We are now doing a study on how to take our carbon black business global. The idea is to have a manufacturing facility either in Egypt or some East European country. We are also looking at China, where we already have a coal-tar pitch facility, for carbon black,” chief executive officer Anuragh Choudhary told DNA.
“A lot of plants in the western world had to close down as they had turned old and were polluting, and also because the cost of production in these geographies started moving up. While these capacities have moved to Asia, the feedstock is still being imported from the West. So if we set up plants close to the western market we would save on both inward and outward freight costs,” he said.
Egypt is located at crossroads with Africa, Asia and Europe, facilitating transportation between these continents.
From being a commodity player, Himadri also plans to move up the carbon black value-chain to specialty carbon black by making higher grade variant that is used in making inks and dyes.
“The main purpose of our subsidiarisation is that we want to focus on this business. When all the businesses are in the same company, cost allocation becomes difficult. We have named the new wholly owned subsidiary as Himadri e-carbon Ltd as we want to position our carbon black business as being environment friendly,” Choudhary said.
However, bringing in strategic investors into the new subsidiary is not on Himadri’s radar now.
“That can happen in future. First, we have to establish ourselves. Investors would come in only when they would see value being generated,” he said.
Himadri is planning to expand carbon black capacities in India as well.
“Like we are expanding our coal-tar distillation business, we also plan to expand our carbon black business, which is a forward integration for us. As we expand our coal-tar distillation capacity to 1 million tonne, we have plans to take our carbon black capacity to 200,000 tonne. Our current capacity is 120,000 tonne, which will now be increased by 80,000 tonne,” he said.
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