HIMADRI CHEMICAL

India's largest maker of coal tar pitch, used in making aluminium and graphite. Founded by Kolkata-based Choudhary family. The second generation, led by Anurag Choudhary, has taken charge.

Secret Sauce Has the technology to convert even low quality tar into high quality coal tar pitch; has the scope to expand portfolio to 22 products from seven.

Financial Dashboard In 2008-09, revenue was $78 million, core profit margin was 38 percent.

What the Smart Set Saw "A quality product that is backed by robust customer service and technology expertise ," says Vivek Chhachhi of CVCI, who says it was Himadri's customers who helped spot and later recommended the company to the private equity major.

Guiding Light To become India's largest 'carbon corporation'.

 

It is easy to miss Himadri Chemicals' plant in Singur, near Kolkata; being a lesser-known neighbour to the unfinished unit of Tata Motors' Nano project. And even the few who did notice it, might not have guessed that what runs through a refinery-kind of network of pipes and storage tanks is coal tar.

Coal tar? Himadri Chemicals' CEO Anurag Choudhary is used to the casual reaction from people. "Most think it is the tar used to make roads," he says. But for Choudhary, coal tar is a multi-billion dollar opportunity that was first spotted by his father and three uncles back in 1987.

 

The main product made out of coal tar is coal tar pitch (CTP) that is used in making aluminium and graphite. "It was totally dominated by the plants of Steel Authority of India. But there was a 500 percent difference in the raw material price and selling price of CTP. We spotted the opportunity," says Shyam Choudhary, Anurag's father.

In 2007, Himadri unsuccessfully tried to take over Rutgers Chemicals, a Germany-based industry leader in CTP. But for Anurag, the whole experience was an eye-opener.

"Rutgers, a $1 billion-company, was making 22 products out of coal tar. We were making only two. So we decided to instead invest for organic growth," he says.

Three years later, Himadri's portfolio has expanded from two to seven products. "Almost 75 percent of coal tar pitch we make is used by aluminium companies, who are doubling their capacities in the next two years. We are also quadrupling our capacity and setting up another unit in China, the world's largest market and maker of aluminium," says Anurag.

 

He now wants to produce over 20 products at the Hooghly unit. Enough reasons for Bain Capital to find its first investment in India in Himadri last year and for Citigroup Venture Capital International, which had fist invested in 2006, to stay put for "at least three more years."