Epsilon Carbon, a manufacturer of carbon black, will make an additional investment of ₹550 crore in its facility located in Vijayanagar, Karnataka. With the new investment, the company will scale its production from an installed annual capacity of 115,000 tonnes to 215,000 tonnes. It supplies carbon black material to tyre and non-tyre market companies.
“We expect to break ground this December, and it will take about 18 months to construct the plant. Once this capacity comes online, we aim to generate annual revenues of about ₹5,000 crore,” said Vikram Handa, Managing Director of Epsilon Carbon. With carbon black production being scaled up, the company intends to close FY23 with revenues of about ₹3,500 crore. It earned ₹1,800 crore in revenue in FY22, Handa added.
The latest investment is a part of the company’s phase II expansion, and after the completion of the second phase, Epsilon Carbon will start its next phase of expansion, explained Handa. The MD told BusinessLine: “Under phase II, our capacity would reach to 215,000 tonnes, which would make it the third biggest manufacturer of carbon black in the country. Once we reach 300,000 c tonnes, we will be the largest single-location carbon black manufacturer in India.”
Capex investment
The latest investment ₹550 crore is a brownfield expansion; with the land and environmental clearances already in place, said the company. “Out of this increased capacity, we primarily want to supply tyre companies in the South. Additionally, around 20 per cent of our volumes will be exported,” Handa added. The capex investment also includes setting up a 25 megawatt (MW) captive power plant to service its entire energy needs within its own integrated carbon complex, said the company.
The company exports to 25 locations worldwide to both tyre and non-tyre companies. The MD said that in India, 65 per cent of its production goes to the tyre companies and 35 per cent to non-tyre companies. The business anticipates that Indian tyre manufacturers will experience tremendous demand over the next couple of years as demand for Indian tyres increases worldwide.
Its carbon black customers include companies such Apollo, JK Tyre and others. Epsilon Carbon runs three businesses - speciality carbon that manufactures for aluminium industry and dyes industry; carbon black for tyre and non-tyre applications; and advance materials which produce synthetic graphite for lithium-ion batteries.