Within a stone's throw of the abandoned Tata Nano factory in Singur stands another unit. The two are a picture in contrast. One is abandoned and the other is throbbing with activity. The latter's strong R&D unit has won the recognition of the Central Government and within its walls an advanced carbon material is being manufactured. It is used in lithium ion batteries and the company is now readying itself for a Japanese entry.
Himadri Chemicals & Industries Ltd (HCIL) is one of the few global manufacturers to produce this ‘ zero impurity' item which is being test-marketed for commercial supplies to Japan. The Kolkata-based HCIL has eight plants in India and one in China.
Anurag Choudhary , CEO, Himadri Chemicals talks about the company's plans in an interview with Indrani Dutta . Excerpts:
From iron casting to cold storages and to advanced carbon materials, could you chart the trajectory of your company?
We were into grey iron castings which we shut down in 1992. We also have cold storages for potatoes. These are largest in West Bengal. But 22 years ago, we started testing the waters in the coal tar pitch chemicals business. It was a fairly difficult domain. We got our raw materials from the coal tar from the coke oven of public sector steel plants from which we derived coal tar pitch. Then we started doing our homework and tried to gauge the customer.
Coal tar pitch is a highly technical product. It is a critical input for making anodes, having a direct impact on the quality of aluminium produced. We were pioneers by the way of scale and technology and learnt by trial and error. We evolved over time.
Gradually, we started importing our raw materials to reduce our dependence on the domestic players. We started supplying anodes to the aluminium industry and electrodes to the graphite industry. It was a two-product company. Then, we started manufacturing other products such as naphthalene, a coal tar pitch derivative. Then, we went to carbon black. Along with it came the power plant, through waste heat recovery. Then, we made SNF (sulfonated naphthalene-formaldehyde condensates), which goes into ready mix concrete. This was 2009-10 in Vapi in Gujarat.
Product expansion seems to be the key to company's success?
Himadri now produces eight by-products out of its coal tar pitch distillation.
We are now into carbon black, naphthalene, SNF and power. We have four plants in West Bengal, and a plant each in Gujarat, Chhattisgarh, Andhra Pradesh and Odisha (which is on lease). For SNF, we have big plans and our first unit in the North is being planned for this. However, this would be in 2014-15, after we stabilise our current expansion plans, now under implementation. Our capacity of coal tar pitch is 2.5 lakh tonnes, which is proposed to be expanded to 4 lakh by December 2012.
We want to redefine the business as a carbon corporation, trying to derive the value from core carbon. We have gone to eight products from two. Our total investment is Rs.1,200 crore for the expansion. Debt is around Rs.1,000 crore.
Could you tell us about zero quinolene insoluble (QI) coal tar pitch?
We developed this 12 years ago. This is used in making advanced carbon material which is used in Li-ion battery.
Globally, there are four manufacturers. Our strong R&D team is behind this product which is made at our unit in Singur and Falta in West Bengal's South 24 Parganas district. It was set up in 2004 on 100 acres.
Tell us something about your China plant
We invested in December 2011 in Shangdon province in Long kon for coal tar pitch. We will be exporting to the global markets from Australia to West Asia. Investment in the unit is $20 million. An additional $30 million comes in the next phase. We have just started exporting to Egypt from this unit.
China gives us the advantages of easy raw material availability, holding 50 per cent of world steel capacity. Opportunity in China is much higher. But Koppers of the U.S., the No.1 in this field, is also present there. China will be the base for serving the overseas markets. But Indian plants will focus on the Indian market. It's a zero discharge plant.
Are you planning any acquisitions?
A few years back we had tried to acquire a German company which is among the top three in this field. We backed out of this even after being chosen the finalists, as we did not agree with the valuations. Now, this company is on the block again. Yes, we are interested but we will have to do a due-diligence again as a few things have changed since then but I will always remember my first experience with the company wherein we learnt a few lessons on product expansion.
