Phillips Carbon Black (PCBL), an RPG Group company, has firmed up a capital expenditure plan of Rs 350 crore to take its carbon black capacity from 360,000 tonnes per annum to 460,000 tpa in two-three years. The company will also increase power generation, within the carbon black projects, from 60.5 mw to 78.5 mw.

Sanjiv Goenka, vice-chairman, RPG Group, said although projects for taking up the carbon black capacity up to 410,000 tpa and power generation up to 76 mw has been lined up, ? we have firmed up plans to expand our carbon black capacity by another 50,000 tonne, for which we are yet to decide on the structure of our project.”

PCBL currently has four facilities at Durgapur (140,000 tpa), Mundra (90,000 tpa), Palej (90,000 tpa) and Kochi (40,000 tpa) producing 360,000 tpa of carbon black. The company will expand the Mundra capacity by 50,000 tonne within the next 12-15 months entailing an investment of Rs 105 crore. Another Rs 50 crore would be spent in adding 18 mw of power generation at Mundra (8 mw) and Kochi (10 mw) taking up PCBL?s total power generation to 78.5 mw within the next 12-15 months from 60.5 mw from Durgapur (30mw), Mundra (16mw), Palej (12mw) and Kochi (2.5mw), Goenka said.

? So we will have another Rs 195 crore to spend on adding another 50,000 tonne capacity, whose final plan is yet to be drawn up,? Goenka said. He said this 50,000 tonne capacity addition might take place in any of the existing units or might be a greenfield project depending on business prospects. PCBL might add another 8mw of power generation while setting up the said 50,000 tonne capacity, he added

?Making a brownfield expansion would save on capital expenditure. For a greenfield project we will consider freight expenses, critical for operations. We are weighing between these two options to find which is better,? Goenka said.

He said besides the expansions in India, PCBL?s plan to have a 50,000 tpa facility in Vietnam entailing an investment of $50 million has been stuck with the Vietnamese government for the company not being able to comply with the laws there. ? In fact, many legal formalities were not clear to us for which obtaining certain clearances have been taking time but the Vietnam government has been very cooperative,? Goenka said.

PCBL, he said, has asked the Vietnam government to bring down the 10% import duty on carbon black feed stock to 0% and has also asked to increase the import duty of carbon black from 0% to 5%. Carbon black, currently fully imported in Vietnam, is a raw material for tyre makers.

PCBL on Wednesday reported a net profit of Rs 122.69 crore on net sales of Rs 1,232.57 crore in 2009-2010 against a net loss of Rs 64.84 crore on net sales of Rs 1,076.02 crore in 2008-09. The company made profits on the back of increased demand of carbon black in the domestic market as well as increased capacity utilisation, which was only 50% during 2008-09, Goenka said.