It was sometime way back in 2008, that Kolkata-based Himadri Speciality Chemical Ltd, a speciality chemical major first tried developing components for lithium ion in the country.
An extensive R&D in the field and about 15-years later, the company finally on December 6, 2023, formally announced plans for setting up what it claims to be India’s first commercial plant for lithium-ion phosphate (LFP) cathode active material. The 200,000 metric tons per annum, catering to 100 GWh of Li-ion battery at cost of over Rs 4,800 crore in next 5-6 years.
The first phase of the plan is to have a 40,000 MTPA at an estimated cost of Rs 1,125 crore and to be operational in about 27-36 month’s time in Odisha.
Cathode materials are critical components required in the production of lithium-ion cells that constitute 50-55% of the cell cost, with LFP being one of the predominant materials used in the manufacturing of LiB cells.
The company is also working on other LiB components, the company’s top executives said.
Anurag Choudhary, CMD and CEO of Himadri Speciality Chemical Ltd stated that project will be able to generate a topline revenue of 4x of the capex. What it means is that, an investment of Rs 4,800 crore will be able to help the company earn Rs 20,000 crore in topline. Plus, the company expects this high margin business to bring an ROCE at the rate of over 25% which is higher than the 18-20% ROCE, the company currently has.
He added that Himadri Speciality Chemical is likely to go net debt free by March 2024, and some profits derived from it will be used in its new business. A major part of the investments will be through internal accruals and loans while the balance will be through debts.
The development comes at a time when the global as well India e-mobility segment stands at an inflection point. As per company’s internal estimates, the global demand for LiB is expected to grow by about 27% annually to reach about 4700 GWh by 2030 and cathode material which is a critical component for the LiB value chain is expected to increase to 9.4 million tonnes by 2030 to meet the required global production of LiB cells.
Choudhary claims that the first mover advantage will help the company to tap the demand for LiB components arising from the government’s PLI scheme in which many auto and battery manufacturing companies are participating. Sourcing from the local companies is an important criteria for availing the benefits of the scheme, which will help Himadri Speciality Chemical, he noted.
Additionally, the company management is also hopeful of receiving significant orders from global companies who are trying to diversify their sourcing from China.
“We are in talks with many of the top global and Indian companies for it” Choudhary said.
Himadri Speciality Chemical Ltd’s currently offers diverse product portfolio which includes speciality carbon black, coal tar pitch, refined naphthalene, SNF, speciality oils, power among others catering to various industries such as lithium-ion batteries, paints, plastics, tires, aluminium, graphite electrodes, agro chemicals, defence and construction chemicals. It also exports to around 49 countries across the globe.