Expanding aluminium sector propels Himadri Chemicals’s investment plans

Himadri Chemicals & Industries (HCIL), India’s largest producer of coal tar pitch, will invest INR 350 crore to meet higher demand arising out of new capacity additions in the aluminium sector and the graphite industry, its main user industries.

The company’s main product line, coal tar pitch (CTP) is a critical input in aluminium smelters, demand for which is slated to nearly double at 4.5 lakh ton per annum (ltpa) with Balco and Vedanta Aluminium ramping up capacity and new capacities being put up by Hindalco’s Utkal Alumina and Mahan Aluminium project.

“We anticipate growing demand due to new capacities coming up in aluminium industry. We are thus investing in raising capacity from 2.5 to 4 ltpa at our main plant at Singur,” Anurag Choudhary, CEO of HCIL said.

Apart from Singur, the company has seven manufacturing units, including one in China and has 70% share of the domestic market.

Coal tar is generated as a by-product from coke oven batteries in steel plants. “From the China plant, we hope to cater to the global market and have supplied the first consignment of liquid pitch to the Gulf region recently,” Choudhary added.

Analysts point out HCIL capacity addition could be mistimed but not miscalculated. “While much depends on when the planned capacity additions in aluminium will come through, its strong foothold in the CTP market in India is likely to benefit HCIL whenever such capacity comes up,” Pritesh Chheda, senior research analyst at Emkay Global said. The shift in aluminium production from Europe to Middle East, China and India is also likely to benefit HCIL, according an industry expert.