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Jun 20, 2011, 07.05 PM IST | Source: Moneycontrol.com

SKP Securities view on Phillips Carbon Black

SKP Securities has come out with its report on Phillips Carbon Black management meet.

SKP Securities has come out with its report on Phillips Carbon Black management meet.

“Philips Carbon Black (PCBL), a member of RP Goenka Group was incorporated on March 30, 1960 and is a leading manufacturer of various grades of carbon black in India. Columbian Chemical Corporation, US, a leading international producer of rubber blacks is the Technical Collaborator of the company.”

“The capacity expansion at Mundra for 50,000 MT of carbon black along with a 8MW co generation power plant are expected to be complete in CY 2011. The Duragpur plant is also undergoing an expansion by 12,000 MW and is expected to be complete by Q4FY12. With these the total production capacity of carbon black shall reach 422,000 MT and power generation capacity to 76MW by end of FY12. The funding is done mainly through internal accruals. All formalities have been complete with regard to the Phase 1 project of 60,000 MT carbon black in Vietnam at a cost of $63 Mn. Work has began and is expected to be commissioned towards the end of CY 2012. The Phase 2 project is of 55,000 MT at a cost of $21Mn and is expected to be commissioned in CY2013. The two projects will also have co generation power capacities of 12MW and 6MW respectively. The whole project is in the form of a Joint Venture in a ratio of 80:20 where PCBL will hold 80% and the rest by 3 local tyre companies. It is to be funded through a debt equity ratio of 2:1. The company has got a 40% market share in Vietnam is expected to benefit immensely as the total demand which currently stands at 65,000 MT is expected to reach 100,000 MT by 2012.”

“The company is in talks for setting up a new carbon black plant in South India of about 140,000 MT. This plant is expected to be complete sometime in CY 2013. Details are yet to be finalized. A coal tar distillation plant is expected to be set up in Angul, Orissa for backward integration. Coal Tar is a byproduct of the steel manufacturing process and the company plans to reprocess it to be used as a substitute of the main raw material, Carbon Black Feed Stock which has to be imported from the USA. The company which currently ranks 8th aspire to become No 4/5 in the next 2-3 years time when all the capacity expansions are complete.

Institutional holding more than 40% in Indian cos

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