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Rediff News  All News  » Business » Phillips Carbon plans power foray

Phillips Carbon plans power foray

March 03, 2004 10:20 IST

Phillips Carbon Black, a RPG group company, plans to diversify into the power business.

A special resolution pertaining to the proposed foray will be tabled before shareholders at the annual general meeting on Thursday.

Sources said the company has identified that a part of the process gas generated during the production of carbon black could be converted into power for sale. At present, the gas is being released into the air.

They added that the proposed foray, which was in sync with the group's business, was expected to enhance profitability.

The RPG group has a strong presence in power making and distribution through CESC, which supplies power to Kolkata.

The Rs 560-crore (Rs 5.6 billion) carbon black maker is in the process of enhancing capacity at its Baroda plant by 70,000 tonne a year. The conversion of the gas will be done at this unit. A 12 MW power plant is also being set up at the unit.

Experts said the future of the company seemed bright as the tyre industry, the main consumer of carbon black, was growing fast.

They added that the only cause for concern was the rise in crude oil prices. However, it was expected that the internal price for crude oil would settle down in the near future, they said.

The company recorded a 10 per cent growth in turnover in the year ended September 2003, which translated into a 244 per cent rise in net profit. Total income grew to Rs 560.96 crore (Rs 5.61 billion) while net profit went up to Rs 18.60 crore (Rs 186 million).

Armed with robust growth, the company has recommended a 25 per cent dividend for the financial year, 10 per cent higher than in the previous period. The resolution regarding dividend payout will also be placed at the AGM.

The company will also seek shareholders' permission to mortgage its property on R N Mukherjee Road at Durgapur in West Bengal with ICICI Bank to secure a loan of Rs 60 crore (Rs 600 million). The amount would part-finance the expansion project, sources said.