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PCBL forecasts Strong Growth in Indian Carbon Black Demand
Industry News- Sep 13,23
Phillips Carbon Black Ltd has forecasted a 5-6% growth rate in demand for carbon black in India.
Phillips Carbon Black Ltd (PCBL) has forecasted a 5-6% growth rate in demand for carbon black in India. This growth is primarily driven by the robust expansion of the tire industry and favourable macroeconomic conditions. The promising prospects of the Indian tire sector, fuelled by increased demand and reduced imports, are expected to positively influence the carbon black industry.
In a recent PCBL investor presentation, several factors contributing to the growth of the carbon black industry were highlighted. These include the acceleration of economic activity, increased infrastructure spending, and the implementation of the vehicle scrappage policy. Import restrictions have also led to decreased competition from imports, which in turn has supported domestic tire manufacturing.
The Indian tire industry is poised for substantial growth in fiscal year 2024, with an estimated expansion of 8-9%, according to the presentation. The presentation emphasised the importance of sustained stability and growth in the Indian tire market, projecting a Compound Annual Growth Rate (CAGR) of 7-9% from FY22 to FY25.
This growth is also attributed to the rising demand for Indian tires in various sectors such as passenger cars, agriculture, and construction, indicating increasing global acceptance of Indian tire products.
In terms of global demand, it is anticipated to grow at a CAGR of 3.5% by 2030. However, India is expected to outpace this rate with a projected growth rate of 5-6% CAGR, further solidifying its position as one of the strongest tire markets globally.
PCBL noted that, on a global scale, carbon black production capacity has grown at a CAGR of 2.5% over the past decade. In contrast, North America and the European Union have experienced stagnant growth trends, expected to continue until 2030. India's capacity, on the other hand, has grown impressively at a 6% CAGR during the same period, indicating a robust domestic market and enhanced export competitiveness.
Carbon black exports from India have doubled, reaching 222 thousand tonnes between 2018 and 2022. PCBL, the largest carbon black manufacturer in the country with a domestic capacity of 770 thousand tonnes, more than double that of its closest competitor, has recently commissioned a greenfield plant in Tamil Nadu with a capacity of 147 thousand tonnes.
The company, in its communication with investors, emphasised its focus on specialty chemicals and value-added products with higher profit margins. In FY'23, capacity utilisation reached 666 thousand tonnes, marking a 10% growth, while revenue surged by 32% to Rs 5874 crore.
Source: Business Standard
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