A 225,000 to 240,000 ton per annum global capacity expansion being implemented by India’s AV Birla Group may see it take over from Colombian Chemicals as the world’s third largest producer of carbon black.
“Over the next six months, we will become world’s third largest producer of carbon black from fourth,” confirmed Rakesh Jain, managing director of AV Birla company Aditya Birla Nuvo. “Thanks to our position serving Asian markets, we have been less impacted by the demand slowdown in end-user industries in the West. In fact, our capacities are completely sold out.”
Due to cuts in vehicle production and consumer hesitance, demand for tires has slumped in Western markets. This has, in turn, affected demand for the ingredients used in their production, including carbon black. However aftermarket demand is slowly returning and the numerous national scrappage schemes have created a particular demand for small, fuel-efficient cars, particularly those from Japanese and South Korean manufacturers. AV Birla, which operates carbon black plants in Thailand, China, India and Egypt, has benefited from this relatively robust demand.
“We are in the process of undertaking brownfield expansions of between 75,000-80,000 tons per annum each in Thailand and Egypt. In addition, we are also setting up a greenfield capacity of a similar tonnage at Patalganga in Maharashtra,” Jain said. The company had previously considered establishing a larger, 120,000-ton greenfield carbon black facility in the west Indian state of Maharashtra. It now appears, however, that AV Birla has opted to spread its capacity expansion across its Asian and African operations. The Rs 2.5 billion (£32.4 million) 75,000 metric ton per annum greenfield site in Patalganga is expected to be completed in March 2010.
The further capacity will be added to Aditya Birla Nuvo’s "Hi-Tech carbon" operations in India, Thailand Carbon Black and Egypt’s Alexandria Carbon. “We leverage our global procurement and scale to source equipment at a lower cost for all facilities in the business,” Jain continued. “Thanks to this, our per-tonne capital costs are significantly below the global average, which gives us leverage with a low capex.”
The company states that its four global carbon black operations currently have a total annual capacity of 790,000 tons. In its results for the quarter ending Sept. 30, Aditya Birla Nuvo reported that the largest of the four, Hi-Tech Carbon, “continues to operate at full capacity utilisation’” and the expansions underway are intended to “tap the robust demand.” The company has not disclosed any plans to increase capacity at its Liaoning Birla Carbon joint venture facility in China. (Tyres & Accessories)
