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AV Birla group mulls carbon black buyouts in China, Europe

Rumi Dutta

The A V Birla group, in a bid to consolidate its foothold in the global carbon black business, is exploring acquisitions in China and eastern Europe.

Senior group executives said, "Carbon black remains our core business and to strengthen our position in the business, we are talking to a few companies in east Europe and China." It is learnt that the group is eyeing state-owned companies in these countries that are being sold by their governments.

The Birlas own over 4 per cent of the global carbon black capacity with plants in Thailand, Egypt and in India, where it is the second-largest player.

Locally, however, the group is facing a rough ride owing to poor offtake by the tyre industry following a recession in the auto sector, which has adversely affected sales.

Kumar Mangalam Birla's late father, Aditya Birla, had earlier set up Thai Carbon Black, the largest producer of carbon black in south-east Asia, and Alexandria Carbon Black Co in Alexandria, Egypt.

This is the second time that Kumar Birla is looking at acquisitions outside India. In 1998, Birla had made his first overseas acquisition when he took over Atholville Pulp Mill in Canada. The unit supplies rayon grade wood pulp to Grasim in India, and his south east Asian units.

"The group is now looking at widening the product range in carbon black and improving presence in the speciality grade. We are also looking at developing non-tyre applications," group officials said.

In India, Birla has two plants at Renukoot in Uttar Pradesh and near Madras with combined capacity of 110,000 tonne per annum. It trails behind the RPG group company Phillips Carbon Black which is the country's largest.

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