PCBL: Russia carbon black sanctions 'impacting margins'

Kolkata, India – PCBL Chemical Ltd (formerly Phillips Carbon Black Ltd) has seen its profitability impacted by EU sanctions on Russian and Belarussian carbon black.

Russian manufacturers are now mostly selling their carbon black in Asia, according to PCBL finance chief Raj Gupta, and that is “impacting our margins.”

“If they don't sell to their regular customers, that means they are going to sell at a discount to other customers, which is margin-negative,” the CFO said on a 10 Jan earnings call.

However, Gupta noted that large tire companies were not buying carbon black from Russia as it might attract “some kind of sanction.”

With increased Russian imports, Gupta said PCBL is feeling the impact on its supply to the customer segments, especially the smaller ones.

According to the PCBL executive, India imports around 100,000 tonnes of carbon black per year, of which 30% is supplied by Russian manufacturers.

“To the extent [that] they are selling 1,500-2,000 tonnes on average monthly… there is some impact which we have to bear,” he added.

On a more positive note, Gupta said the measures against carbon black from Russia and Belarus could provide market-penetration opportunities for PCBL.

In Europe, for instance, the finance chief said it had "been very difficult for us to get access to those customers for so many years.

"And then this issue in Eastern Europe happened and all the customers were willing to buy from us.” 

And once the relationship is established, it becomes long-term, the CFO concluded.