• Writing my letter to you last year, I was so enthused that shedding the usual Chairman’s caution, I pledged to elevate PCBL “to the next altitude of value creation”. A year later, I am delighted, that promise has been achieved and defying all the overseas business tension and home competition, PCBL, in FY18, could outperform our expectation.
  • This year we had record-breaking production of Carbon Black, achieving the highest-ever output from the four plants, the highest-ever turnover, as also profits. It is a pleasure that all our plants well-known for their strategic locations increased their capacity utilisation and achieved encouraging cost benefits through production efficiencies.
  • While fighting the present, we have not overlooked the future scenario and we have initiated substantial capacity addition during the year. We also are ready for another greenfield project, this time in South India. To summarise, we successfully continued our growth momentum and achieved an encouraging rise in revenues, as also profit. Our cost efficient operations and the philosophy of prudent inventory management have led to noticeable debt reduction.
  • As India prepares to move a fast foot forward to higher efficiency, I continue to be in an optimistic mood. Barring unforeseen developments in international markets, our dynamic team should ideally make FY19 another record-breaking year for PCBL and all its stakeholders.
  • The results achieved in the year under review were the outcome of several achievements, including a bold shift in product mix to higher value-added premium grades, leveraging of expanded product portfolios, as also the expanded geographical reach of PCBL products.
  • Keeping an eye on the growing needs of the industries we serve, PCBL is further expanding its annual capacity by 56,000 tonnes at Mundra and 32,000 tonnes at Palej (both in Gujarat). Our clear aim is to complete these two expansions by the second quarter of FY20.
  • We work for leading tyre companies around the globe such as Bridgestone, Goodyear, Michelin, Continental, Loadstar, Yokohama, TVS, Nexen, CEAT, MRF, JK, Sumitomo, Apollo, BKT and Kumho. Similarly, our non-rubber customers include prominent names across the globe.
  • Carbon black is the pure elemental carbon found in the form of black powder. It is produced by the thermal decomposition of gaseous or liquid hydrocarbons under controlled conditions. Its unique properties make it useful inter-alia, as a reinforcing agent, pigmentation, UV protection and also as an excellent conductive agent.
  • We serve our customers with a complete portfolio of products across American Society of Technical Manufacturers (ASTM) grades, along with customised, highperformance-oriented products catering to our customers’ specific requirements across tyres and moulded rubber goods, plastics, coatings, inks and other niche industries globally. Gradually moving up the value chain, we have expanded our portfolio of high-performance value-added products for both Rubber and Specialty Black applications.
  • We market our Specialty Black under the brand name – Royale Black. Each of our Specialty Black products has its own personality and functionality, but they have one thing in common: they all symbolise or embody supreme quality. We are one of the three carbon black producers in the world to meet the stringent US FDA requirements for direct/ indirect food contact plastics applications such as plastic food trays and cutleries. Today, our product range can cover more than 90% of the global demand in plastics applications.
  • We have broad-based our raw material sources by developing multiple vendors (indigenous and global). Today, around 85% of our raw materials are sourced from international sources and 15% from India.
  • The carbon black industry is dominated by rubber carbon black used in tyres as a reinforcing material. Rubber carbon black markets are largely regional oligopoly markets. Non-tyre rubber black and carbon black used in non-rubber applications are smaller markets in terms of tonnage, but more profitable than rubber black. The carbon black industry is fairly consolidated, with the top 10 players accounting for 62% of global capacity, while the Indian market is majorly consolidated with four players.
  • The global carbon black industry is projected to grow at a rate of 3 – 3.5 % CAGR with demand outpacing the supply. Demand in advanced economies such as the US and the European Union (EU) is growing at a relatively slower rate compared to that of the Asian countries.
  • PCBL’s business and financial performance has seen significant improvement in the last 4 years after the Company embarked on a journey of excellence across the organization.
  • The demand for Carbon Black in India is estimated to grow at 6-8% in the coming years. Overseas demand for Carbon Black has been forecasted by Carbon Black experts to grow at relatively lower rate. We have established a supply chain distribution network to ensure timely delivery and strong relationship management to service our customers, thus widening our presence in the international market.With its wide product portfolio basket in rubber blacks, growing high-performance rubber black and Specialty black capability, manufacturing units located strategically near customer locations and capacity expansion at its existing units of Palej and Mundra, the Company is well positioned to meet the increased demand.
My note: It is interesting to note the transition of the company’s annual reports from black and white to coloured and full of graphics in the past few years. Probably one should aim to buy promising companies when their annual reports are mundane and evaluate the prospects when they turn graphical and full of information? 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *