“Recycled aluminium is not available in large volumes. Hence, virgin aluminium will be in demand, especially in a country like India, where, today, scrap has not reached that level of volume,” Vikram Handa, Managing Director, Epsilon Carbon Pvt Ltd
Vikram Handa established Epsilon Group in 2010, a prominent industrial conglomerate dedicated to advancing the global carbon black and battery materials sector. With a mission to decarbonise economies and foster cleaner technologies, the group has distinguished itself through its subsidiaries, Epsilon Carbon and Epsilon Advanced Materials.
Under his stewardship, a state-of-the-art, fully integrated 320,000 TPA specialty carbon plant was inaugurated in 2017 in Bellary, Karnataka. The company later expanded into the Carbon Black segment, launching operations with a 115,000 TPA production capacity. This Integrated Carbon Complex boasts a 10 per cent lower carbon footprint than its global counterparts and operates as a zero water discharge facility. With aggressive expansion plans, Epsilon Carbon is poised to become India’s third-largest Carbon Black producer, targeting a 215,000 TPA capacity. The company’s next growth phase is driven by a Rs. 10,000 crore investment to establish an integrated carbon facility in Jharsuguda, Odisha.
In 2018, Mr. Handa founded Epsilon Advanced Materials Pvt Ltd. (EAMPL), marking the group's foray into the sustainable battery materials market for EVs, Energy Storage Systems (ESS), and electronics. The company envisions a vertically integrated manufacturing ecosystem for synthetic graphite anodes in India, striving to become the preferred supplier for global battery cell manufacturers. It successfully launched India’s first graphite customer qualification anode material facility in Bellary, Karnataka, with expansion plans to 100,000 TPA in India and an additional 100,000 TPA across North America and Europe by 2030.
More recently, the acquisition of a lithium iron phosphate (LFP) cathode active material technology center in Moosburg, Germany, aligns with Handa’s vision of making Epsilon the first global company to supply both cathode and anode materials for lithium-ion batteries. In a candid conversation with him, we try and uncover the pros, cons and future outlook as envisioned by the coal tar pitch maestro.
AL Circle: What properties of high-end binder grade pitch make it suitable for use in the aluminium manufacturing process, and how is Epsilon looking into expansion in the Indian aluminium industry?
Vikram Handa: The binder pitch that we make is for the aluminium industry to make anode, which comprises 15 per cent binder pitch, and the other 85 per cent is Calcined Petroleum Coke (CPC). It is a mechanical process where everything is crushed, blended and then baked. When the anode is baked, it goes into the pot, both anode and cathode, where electrolysis happens. The strength of the anode depends on how long it lasts in the electrolysis process, which means it’s consumable and is defined by binder pitch properties.
The entire process is highly controlled because a lot of power is consumed, and the aim is to maximise the yield of aluminium. A high-end binder pitch is something that gives customers better yields. We have the means to make different grades of binder pitch, and we work closely with customers to do this. We supply the pitch to customers, which is then qualified for commercial scale. It takes somewhere around six to eight months to get the feedback. High-end binder pitch is essential to manufacturing premium aluminium products.
Let’s take other applications, like aerospace or space applications or very high-end metal installations where high-purity aluminium or a special aluminium alloy is needed. This is designed based on the pitch availability. Factors like a very low percentage of Zinc matter a lot in pitch to give better yields in aluminium.
Talking about the Indian market in the past few years (last seven to eight years), we have not seen much expansion of the aluminium segment in India. A major expansion was Hindalco, and some expansion was happening at Vedanta. In the next two to three years, we foresee growth in the aluminium industry in India, which is good for us as well as for the overall industry. We look forward to them as long-term customers and to catering to them in the future. But in India, the steel growth has been happening much faster than the aluminium growth, leading to the generation of more coal tar, hence, more pitch, whereas aluminium is not growing at the same pace, and that is why a company like us has focused a lot on exports of pitch, because today, the pitch production is much more than what Indian market could consume.
AL Circle: Aluminium is in an energy-intensive industry. The smelting process, along with the entire production process, leads to a lot of carbon emissions. As we talk about analysing the smelting process, the electrolytic process, is there a plan? Is there any way this binder pitch or the anodising process can, in the future, control carbon emissions and make it a little more energy/environmentally efficient?
Vikram Handa: The two most significant raw materials used to make aluminium are power and bauxite. If you look at coal tar pitch, it’s between 1 and 2 per cent of the production cost. It’s a very low cost in the whole manufacturing process, but it’s essential for the quality and yield of aluminium. Aluminium is one of those metals that give you a premium for green aluminium. And we see companies are quite focused on recycling aluminium. And the market gives them a premium. Pepsi or Coke gives a premium for a recycled aluminium can versus a virgin aluminium can.
In India, we see that our customers are trying to move to other power sources. They’re trying to use more renewable power. We are one of the unique companies that did a life cycle analysis of our coal tar pitch two years ago, and we shared it with customers, because customers have sustainability goals, and our product fits right into their sustainability (matrix or number). We are producing coal tar pitch with a lower carbon footprint, which definitely benefits them. The aluminium industry recognises the same and is willing to recognise us as a preferred source or supplier for pitch because it has a lower carbon footprint. This is one industry that’s mature enough and, has a very clear ESG road map and is very particular about looking at sources that comply with the ESG road map.
AL Circle: You have mentioned that the industry in India, the aluminium industry especially, is not expanding that much, and that poses a challenge for Epsilon. Other than that, have you faced any other challenges while expanding or operating in the Indian aluminium industry?
Vikram Handa: We are the 1st Indian manufacturer of liquid coal pitch to deliver at about 200 degrees throughout its journey. The reason for building this infrastructure is that a lot of smelters in the Middle East and global markets only use liquid pitch. In India, there is a mix of smelters that use both solid and liquid pitch. One of the challenges in India is freight, which is a very high-cost component. We have a dedicated fleet of 125 tankers that take coal tar pitch at 220 degrees to a customer’s location and drop it off there. The challenge in India is that some customers are not as mature as Middle East smelters. From a process and traceability point of view, we see Middle East smelters having much better SOPs. If an aluminium ingot is of some wrong quality, they can trace it all the way back to the source of the pitch. They keep products like pitch in separate tanks, and they work very closely with suppliers to improve quality and process. In India, it’s very cost-conscious, so they take supplies from all 20 sources and put them in one tank, hence no traceability & quality integration.
Whereas, In the Middle East, all coal tar pitch comes is vital, as all smelters are at the port, and the dedicated heated ships that bring the liquid pitch to them at the port and drop it off into tanks form a closed loop, handling consciously without any dust or pollution. In India, the smelters are near the minesWe were the first company in India to set up liquid pitch tanks in Mangalore, where we have a dedicated tank with 10,000-tonne capacity, from where we ship out to Middle East & African markets; otherwise, there was no way to export liquid coal tar to global markets. Over the last two years, we have been exporting more and more globally, with world-class quality and better supply chain processes. We continue to cater to the Indian market, but our international market demand is growing much faster. International customers give us long-term visibility and long-term contracts, and we, being a premium supplier, can cater to the increasing demands.
AL Circle: You talked about exports. Which countries do you think is going to be/are your major exporters? And what have they shared as feedback about Epsilon’s contribution towards their production purposes?
Vikram Handa: We cater to all five Middle East smelters, including likes of Rio Tinto and Alcoa. There are other larger players, too, along with smaller smelters in Egypt, Indonesia, and South Africa. We are pretty much with every market as trusted suppliers by both ex-China and ex-Russia. The feedback from all customers is quite encouraging as our proposition of completely backward integrated manufacturing ensures their sustainability goals, too. We have a dedicated long-term supply of raw coal tar from two large steel plants of JSW, and the consistent quality of raw materials also helps us produce consistent finished goods. Last year, we distilled close to 300,000 tonnes of coal tar as a business. This year, we are expanding both in Karnataka and Orissa. If I look down two years from now, we should be close to 700,000 tonnes; that’s more than doubling in capacity. Definitely, the Indian market is not doubling in size, and that is where our focus is more on long-term contracts with global customers.
AL Circle: What sets Epsilon Carbon apart from other suppliers of binder pitch, and what unique value proposition do you offer to customers in the aluminium industry?
Vikram Handa: As a company, we have a very similar sustainability roadmap to our customers. A few things we’ve done have reduced our carbon footprint by more than 17 per cent of our product. The coal tar pitch that we make in India has about a 20 per cent lower carbon footprint than what’s made out of China. These are unique propositions which customers appreciate and make us a preferred supplier. Our backward integration, growth, and ability to hold inventory for them get us into long-term contracts with clear pricing contracts.
We are not opportunistic in pricing, and all the customers are also keen to get into long-term contracts with us. I think these are the things which customers look for, and while it’s only 1- 2 per cent of the total production cost, inferior quality can shut down a pot line, thus hampering aluminium production. Customers really look for reliable, long-term suppliers who can consistently supply them. And that’s where, in the last five years, we’ve created a niche for ourselves in India and, more recently, globally, where customers look at us like that.
AL Circle: Rather than primary, many countries are looking towards recycled aluminium. Other than a few products, many downstream and end-user products today are made from recycled metal. Does that pose a threat to Epsilon, the anodising process or the smelting process?
Vikram Handa: No, not exactly. Recycled aluminium is not available in large volumes. Hence, Virgin Aluminium will be in demand, especially in a country like India, where, today, scrap has not reached that level of volume. Most metals are still made the Virgin way. Whether you look at steel or aluminium, it’s still being made through the Virgin route, not the recycled route. The industry is also pivoting. We hear about different aluminium-making technologies that won’t require binder pitch.
These are things that are still in their early phases. Those new technologies will still take decades to mature. One interesting thing is, if you look at coal tar pitch, it’s made out of coal tar; as such, coal tar production has died in the US, Europe, Japan, and Korea, and it’s shrinking continuously because steel-making technology is changing. India is the only country in the world where coal tar availability is growing. Even China has been pretty much flat for the last two years. Their steel making has moved to electric arc-furnace rather than blast furnaces, while in India, it’s blast furnace and coke oven route. India is the only shining star where coal tar is increasing; hence, coal tar pitch is rising. That’s where aluminium customers realise the next source will be from a country like India, where raw materials are available.
AL Circle: Renewable energy has been in focus and under the spotlight for quite some time now. I think that shift is quite evident throughout the world. What is your stance on the matter?
Vikram Handa: For power, especially in a country like India, where today renewable, round-the-clock power is potentially cheaper than coal, you can do these PPAs. States like Orissa are growing in renewable power. You will see Indian smelters moving towards that versus using coal-fired power.
