Epsilon Carbon to invest Rs 500 cr to expand capacity of K’taka plant

Carbon black producer Epsilon Carbon is investing Rs 500 crore to add 1 lakh tonne more capacity at its Karnataka plant, which will make it the third largest producer of the material when completed.

The proposed capex plan also includes an additional Rs 50 crore investment to set up a 25-mw captive power plant that will be fired by the waste gas generated by the carbon black plant, the company said.

Currently, the company has an installed annual capacity of 1.15 lakh metric tonne in the Vijayanagar, Karnataka plant, which was commissioned at an investment of Rs 500 crore in FY2019 and this gives it a market share of 7 per cent in the 1-million tonne industry (Rs 10,000 crore industry), Epsilon MD Vikram Handa, who is the son-in-law of the JSW group chairman Sajjan Jindal, told PTI on Monday.

He said once the new capacity goes on stream it will have 2.15 lakh tonne annual capacity, which will put the company in the third position in terms of capacity and it will have a market share of 14 per cent.

On revenue, Handa said the company had closed FY22 with Rs 1,800 crore, of which 20 per cent came from exports across 25 markets and this year, the revenue is likely to touch Rs 3,500 crore on price rise, (a tonne of carbon black fetches USD 1,300 now) and next year the top line should be Rs 5,000 crore. The Rs 10,000 crore domestic carbon black industry is led by Philips Carbon Black and Birla Carbon at the top slots.

On exports, the company will focus on Europe and North America which were dependent on Russian supplies till it invaded Ukraine in February this year. So, that is a large market for us to be tapping. Similarly, the growing domestic tyre market is another huge opportunity. The non-tyre market is also a growth avenue, he said. Handa said the capex will be funded through internal accruals and debt.

Carbon black is a finely divided form of amorphous carbon, obtained as soot from partial combustion of hydrocarbons, and is used principally as reinforcing agents in automobile tyres and other rubber products but also as extremely black pigments of high hiding power in printing ink.

Epsilon Carbon claims to be a fully backwards-integrated manufacturer of speciality carbon, carbon black and advanced carbon.