Q&A: Birla Carbon leader upbeat about long-term prospects, net-zero goals

ERJ: How do you see demand for carbon black developing over the next 18 months, and then to 2030?

JL: Uncertainty has certainly impacted the economy over the past several quarters as consumers have been cautious about future conditions due to factors such as interest rate changes and the political environment, with numerous countries holding elections. This has driven slower than historical growth, and these factors may continue to pressure demand, maintaining a slow but steady growth environment in the near term.

However, we see the long-term dynamics as healthy with stronger growth supported particularly by specialty applications such as plastics, coatings, and energy systems. These dynamics align well with our focus on innovation in higher value segments. Geographically, South and Southeast Asia will be the growth leaders where we are making major investments to support our customers’ demand.

ERJ: To what extent have markets and supply chains adapted to the EU ban on Russian carbon black imports from Russia?

JL: Despite the upheaval caused by unexpected changes such as the EU ban, we find our customers and the value chains they serve typically adjust effectively given adequate time. Birla Carbon’s global footprint certainly supports these needs, ensuring a secure supply of all products is available anywhere. This is a trait that has become more and more valuable as supply chain risks have elevated.

The material that was previously supplied from Russia to Europe now finds its way to other markets where bans do not exist. As a result, we must demonstrate agility to support areas of deficit while the market equilibrates. This is a core part of Birla Carbon’s approach to the market.

Overall, we remain optimistic. This period of change presents opportunities to strengthen partnerships, drive innovation, and reinforce the resilience of our industry. At Birla Carbon, we look forward to continuing our journey with our partners, ensuring we progress our long-term ambitions while navigating these types of disruptions.

ERJ: What is the outlook for prices over the next 18 months in Europe, North America, and Asia?

JL: While I cannot comment on our specific pricing expectations, the carbon black market will continue to be driven by a combination of supply/demand fundamentals in each geography, along with the need for significant investment in this industry to support sustainability, innovation, and capacity to meet our customer’s needs. We are confident the value we bring will be recognized by our partners.

ERJ: What is Birla's strategy for investment in new capacity to meet demand in the main global regions?

JL: Reflecting our commitment to meet rising global demand and supporting the needs of our customers across value chains, we are in the midst of an unprecedented investment period for the company, with two greenfield expansions in Asia and one brownfield expansion in Europe well underway. We see these two geographies as seeing the most near-term support needs while leveraging this new capacity to satisfy requirements across our global supply chain network.

We are committed to expanding our capacity and capability to meet market needs regardless of geography with innovative technology supporting unique products and processes that align with our Net Zero ambition and the sustainability needs of our planet. It is important that the market dynamics are in place to support appropriate return for these investments for our shareholders; therefore, we work closely with our customers, ‘sharing the future’ to ensure our footprint expands aligned with their needs.

ERJ: What is your advice to carbon black buyers looking to balance the need for stable supply and cost pressures today and going forward?

JL: Every industry has to balance these needs, along with long-term imperatives such as reducing the carbon footprint of the overall value chain. The key is for us to work together in a collaborative approach that ensures our respective energies and investments are aligned effectively, allowing us to optimize the entire supply chain.

ERJ: To what extent is ‘sustainability’ a differentiator when it comes to selling (and buying) carbon black?

JL: Sustainability is core to Birla Carbon’s strategy with our holistic approach representing a true differentiator in the market that is appreciated by our customers. We find that everyone is increasing the importance they place on sustainability in their operations and buying decisions. This is driven by a noble desire to do good, the undeniable needs of our planet, and pressure from investors who understand a company can only create value over the long term if the long-term impact of their business is aligned with the needs of the planet.

At Birla Carbon, we continue to develop products based on bio-based and renewable feedstocks, have gotten all of our factories certified as ISCC+ to provide certainty in our renewable offerings and incorporate sustainability into all aspects of our business from strategy to R&D to operations. 

ERJ: Do environmental performance metrics, such as ‘product carbon footprint,’ cut much ice in the market today, and what progress is Birla making on this front?

JL: Environmental performance metrics, such as ‘product carbon footprint,’ are increasingly significant in today’s market as stakeholders and consumers alike demand greater transparency and responsibility from companies. At Birla Carbon, we are fully committed to advancing our environmental performance and making a positive impact.

Our life cycle assessment (LCA) processes are central to this commitment, allowing us to evaluate our environmental footprint from “cradle to gate” following ISO 14040 guidelines. This approach helps us accurately measure CO2 emissions and identify areas for improvement, driving our efforts to reduce our overall carbon footprint.

We are actively developing new carbon black solutions that enhance the sustainability of our customers' products. For instance, our innovations in tire manufacturing focus on reducing rolling resistance and improving durability, which in turn supports better fuel efficiency and lower emissions. Additionally, we are working on grades that use less water and require less energy during production, further minimizing environmental impact.

We generate more energy from process waste than we consume, recovering and repurposing energy from our facilities to benefit local grids and communities.

In August 2021, we were the first in the carbon black industry to announce our aspiration to achieve net zero carbon emissions by 2050. We are working with our partners to make this a reality, and we find this approach is increasingly important to our customers and stakeholders.

ERJ: What is your vision for the development of Birla’s manufacturing capabilities, product portfolio, and environmental footprint by 2030?

JL: At Birla Carbon, we are investing in R&D, cutting-edge process technology, and advanced production techniques to enhance sustainability, efficiency, and scalability. By 2030, we will demonstrate clear progress on our path to Net Zero, have a much larger proportion of our product portfolio aimed at reducing the carbon footprint of the value chains we serve. I am confident we can take advantage of this unprecedented opportunity to make a positive difference.

ERJ: Thank you