Himadri in five years will be a totally different company: CEO Choudhary

"The existing business is growing, positioning Himadri among the top three players in specialty carbon black," he says

Betting on electric vehicles (EVs) to catalyse a revolution in mobility, Himadri Speciality Chemical has announced India’s inaugural commercial plant for lithium iron phosphate (LFP) cathode active material, a pivotal component for EV batteries. In an interview, ANURAG CHOUDHARY, chairman and managing director and chief executive officer, shares insights with Ishita Ayan Dutt about the company’s diversification into lithium-ion (Li-ion) battery components and how it will reshape the company, contributing to the top line. Edited excerpts:

Why did you choose LFP as the cathode material?
 

India being a tropical country with high temperatures makes LFP the best chemistry in terms of safety. In the case of nickel-manganese-cobalt (NMC), high temperatures can lead to the release of toxic cobalt oxide, posing a potential hazard. This is conducive to China, the US, and Europe.

The cost of production is also a crucial factor. NMC cathode material, utilising nickel and cobalt, incurs high costs. We believe that the majority of demand will come from the lower economic stratum or economical cars. LFP, due to its cost advantage, will be more prevalent, and that’s where Himadri is directing its focus.

You have provided a timeline of 27 to 36 months for the commercial production of the first phase of the plant, which has a capacity of 40,000 tonnes. Do you foresee domestic demand meeting this capacity?
 

We lack clarity on whether there will be sufficient domestic demand by then. However, I am confident that we will easily sell the material to global companies, targeting the US and Europe.

Do you have offtake agreements with customers for the cathode material?
 

As of today, we don’t have offtake agreements, but discussions are ongoing. We plan to finalise agreements by the time we commence commercial production.

Companies in India are investing in cell manufacturing.
 

They are our customers. Over the past 30-35 years, three big revolutions have occurred globally — electronic, solar, and mobile. India has been merely an assembler in all three. The fourth revolution, the EVs and stationary energy storage revolution, is underway. The government’s introduction of the production-linked incentive scheme for cell manufacturing is a step in the right direction. Cathode constitutes 52 per cent of a cell’s cost.

To make the cell, you will need components. If the components are being imported, then there is no value addition. That is where Himadri will play a critical role. We are the first to go ahead with this capacity. The highlight of this project is that it’s a pioneering step towards Atmanirbhar Bharat.

We are also working on the anode, which is 15 per cent of the cell cost.

For the anode, do you have a minority stake in an Australian company?
 

Yes, that is in progress. We will be announcing the next-generation anode.

Where do you see Himadri five years hence?
 

Himadri, in five years, will be a fundamentally different company. With a 200,000-tonne capacity for cathode, translating into a top line of Rs 20,000 crore at 100 per cent capacity utilisation, Himadri will also have various types of anodes.

Birla Tyres, operating in different segments of the tyre industry, including off-the-road and EVs, will be part of the portfolio. The existing business is growing, positioning Himadri among the top three players in specialty carbon black. In essence, Himadri will evolve into a big conglomerate in specialty chemicals, housing all its businesses under one umbrella.

Are you considering backward integration with the upcoming auction of critical mineral blocks?
 

We are not a mining company and do not want to venture into mining. However, if a company acquires mining rights, we may explore offtake agreements or consider a minority stake.

You are headquartered in Bengal but setting up the plant in Odisha. Is it because of incentives?
 

We have set up one of the most integrated plants for carbon chemicals in the world in Bengal, making it the site for the fourth-largest producer of specialty carbon black globally. Acquiring Birla Tyres in Odisha marked our second unit in the state. The government’s support and proactive stance, coupled with the incentive package offered, influenced our decision to establish the LFP plant in Odisha.

Himadri’s target is 200,000 tonnes of LFP cathode active material to cater to 100 gigawatt-hour Li-ion batteries in five to six years. Will you have multiple plants to reach that capacity?
 

The first phase of the 40,000-tonne capacity will be in Odisha, and decisions about additional plants are contingent upon factors such as land availability, locational advantage, and incentive packages.