 "Carbon black")
Phillips Carbon Black Ltd (PCBL) has projected that Indian carbon black demand will grow at a growth rate of 5-6 per cent, driven by the robust expansion of the tyre industry and favourable macroeconomic factors.
The promising outlook for the Indian tyre industry, buoyed by increasing demand and reduced imports, is expected to have a positive impact on the carbon black sector.
Carbon black is a key raw material in tyre manufacturing.
A PCBL investor presentation on Monday highlighted several factors propelling the carbon black industry's growth, including the acceleration in economic activity, increased infrastructure spending, and the implementation of the vehicle scrappage policy. Additionally, import restrictions have resulted in reduced competition from imports, bolstering domestic tyre manufacturing.
The Indian tyre industry is positioned for substantial growth in fiscal year 2024, with an estimated expansion of 8-9 per cent, it said.
The presentation emphasised the need for sustained stability and growth of the Indian tyre market, projecting a Compound Annual Growth Rate (CAGR) of 7-9 per cent from FY22 to FY25.
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This growth is also attributed to the increased demand for Indian tyres in passenger cars, agriculture, and construction sectors, reflecting a growing global acceptance of Indian tyre products.
Regarding global demand, it is anticipated to increase at a 3.5 per cent CAGR by 2030. India, however, is expected to outpace this rate with a growth projection of 5-6 per cent CAGR, further solidifying its position as one of the strongest tyre markets on the global stage.
The company stated that on a global scale, while carbon black production capacity has grown at a 2.5 per cent CAGR over the past decade, North America and the European Union have witnessed stagnant growth trends, expected to persist until 2030.
In stark contrast, India's capacity has grown at an impressive 6 per cent CAGR over the same period, signifying a robust domestic market and enhanced export competitiveness.
Carbon black exports from India have doubled to 222 KT (thousand tonnes) in the period between 2018 and 2022.
PCBL, the largest carbon black maker in the country with a domestic capacity of 770 KT, which is more than double that of its nearest competitor, has recently commissioned a greenfield plant in Tamil Nadu with a capacity of 147 KT.
The company, while informing investors, highlighted its focus on speciality chemicals and value added products with higher margins. In FY'23, capacity utilization reached 666 KT, marking a 10 per cent growth, while revenue surged by 32 per cent to Rs 5874 crore.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
