Phillips Carbon in 3-pronged growth plan

Phillips Carbon Black Ltd (PCBL) has finalised a three-pronged growth plan envisaging expansion of capacity, bottomline growth though co-generation of power and exports that would help the company to record turnover of Rs 1,000 crore in three years.

Talking to Business Standard after the 43rd annual general meeting (AGM) yesterday, chairman Sanjiv Goenka said the company was exploring the possibility of adding another unit. It has three plants at present.

"The new unit may be a greenfield project, an acquisition or a foreign venture," he said. The company was in the process of expanding capacity and converting gas that was being burnt at the end of the production process to co-generate power at Durgapur and Baroda plants.

While 25,000 tonne per annum (tpa) of carbon black capacity would be added at the Durgapur plant, another 75,000 tpa would be added at the Baroda unit.

Power plants having capacity of 25 mega watt (MW) and 15 MW would be set up at Durgapur and Baroda units respectively. The combined capital expenditure for the expansion would be Rs 200 crore.

Goenka said he was optimistic that the decision to enter the power trading business would double profits. The proposed power business would add nearly Rs 25 crore to the company's bottomline in two years.

PCBL last year recorded profit before tax of Rs 24.34 crore on sales of Rs 560 crore. Net profit during the year stood at Rs 18.60 crore.

The company said part of the gas generated during the production process, now being released after flaring, could be converted into power.

Power generation will begin at the Baroda unit first and later at Durgapur plant. PCBL would sell the excess power, not required by the plant.

Goenka said the company has tied up with a third party to sell surplus power generated at Baroda.

Goenka said exports "have more than doubled" and the company had tied up with a foreign major to supply carbon black for seven years. He, however, declined to divulge the identity of the foreign major.

Stock market experts said Bridgestone could be the possible customer. PCBL now exports carbon black to Bridgestone.

According to Goenka, PCBL will supply 25,000 tonne to the foreign tyre giant in the first year and the quantum will be enhanced in stages to 100,000 tonne in fifth year.

The company, which recorded a 244 per cent rise in net profit, declared 25 per cent dividend compared with the previous year's 15 per cent.