January 21, 2010 / 11:29 AM / 8 years ago

UPDATE 1-Phillips Carbon to set up $50 mln plant in Vietnam

KOLKATA, Jan 21 (Reuters) - Phillips Carbon Black Ltd (PHIL.BO) said on Thursday it plans to invest $50 million to set up a 50,000 metric tonnes per annum plant in Vietnam, in a joint venture with three Vietnamese state-run firms.

Phillips Carbon Black will hold 80 percent in the plant, which will be commissioned in 2011, the company said in a statement.

“We have signed a joint-venture agreement with three Vietnamese govt-owned tyre companies - Casumina, Danang Rubber and Sao Rubber for setting up the first carbon black plant in Vietnam,” Sanjiv Goenka, chairman told reporters on Thursday.

This is Phillips Carbon’s first overseas venture and the firm will have 80 percent of the stake in the joint venture, he said.

The proposed plant will have a carbon black capacity 50,000 metric tonnes and a 12 MW co-generation power plant initially, he said.

“We already have the land in possession and currently, environment impact assessment is in progress. In the second phase, the capacity will be scaled up to 100,000 metric tonnes carbon black and 16 MW power plant,” Goenka added.

The Kolkata-based company is planning to invest 5 billion rupees over the next 18 months to fund its expansion, inlcuding the Vietnam plant, he said.

“In addition to the Vietnam project, we are also increasing our carbon black capacity in Mudra by 50,000 metric tonnes, and adding power capacity at Cochin,” Goenka said.

Post expansion, the total capacity from its 4 domestic plants would go up to 400,000 metric tonnes of carbon black and 90 MW of power, he said.

The fund raising would be at a debt/equity ratio of 1.5:1. Details are yet to be worked out, he said.

“Our board will be meeting in six weeks to decide on the timing and size of the issue. We would definitely like to tap the market in three months time,” Goenka said.

Earlier in the day, Phillips Carbon reported a Oct-Dec net profit of 336.3 million rupees as against a net loss of 459.8 million rupees in the corresponding period last year, the company said in a release.

In the same period, its net sales were up by 32 percent to 3.47 billion rupees.

Reporting by Niladri Bhattacharya; Editing by Prem Udayabhanu

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