High export potential prompts Adam Capital to up investment in activated carbon subsidiary

By Shehana Dain

The growing potential for exports has encouraged Adam Capital Plc to invest further to modernise and expand its activated carbon subsidiary.

“We acquired the company at Rs. 300 million and we invested another Rs. 50 million to get the factory to operate. The company was re-valued recently at Rs. 530 million prior to production commencement. We are planning to invest an additional Rs. 50 million by the time we get to stage two,” Adam Capital Plc Chairman Ajita Pasqual told Daily FT.

He also stated that the bulk of the investment will be utilised to upgrade the rotary kiln and to operate an additional gasifier.

Adam Carbons was previously known as Bieco Link. It is a fully-owned subsidiary of Adam Capital Plc and was rebranded on 18 February this year.

The company is also planning to expand its export books by shipping 40 MT of activated carbon to South Africa and the US in the following three weeks.

Two shipments of 20 MT, each valued at approximately $ 40,000, will be shipped to the South African gold mines by the end of September and to the US during the first week of October.

The export order comes on the heels of the company’s first successful order of 40 MT of value added carbon worth $ 39,000 to Taiwan which was finalised on 18 September.

Pasqual further stated that he saw great potential for the Sri Lankan activated carbon market as the quality of the final product manufactured locally was much better than that of most international exporters. 

“Our activated carbon is rated very much higher than a lot of competing countries such as Indonesia, Thailand and India; that’s a major advantage for us. There’s a certain component, apparently arsenic, that goes into the shell and I think our raw material is comparatively much cleaner and the coconut shells we use are harder. The South African gold mine orders are specifically for the Sri Lankan activated carbon which they use for the whole extraction of the mines,” he added.

He also stressed that one of the primary concerns in the industry now was accessibility to raw materials. “I think some of the industry leaders like HAYCARB Plc and Jacobi Carbons also import certain components. So we also sometimes find it difficult to find resources. The Government has given us BOI status and support in that aspect but I think the EDB can actively promote the product and get us value addition partners, which would be highly beneficial. We are not asking for donations but we are asking for people who can collaborate with us and invest to add value to the product.

“Currently we are selling one MT at $ 1,900 but there are products in the market that sell for $ 6,000-$ 8,000 per MT. That’s a huge difference and that’s where we like to see the technical aspect supported. I think this can be achieved through trade fairs and active participation by exporters,” Pasqual noted.

He also highlighted the management’s intention to turn Adam Carbons Ltd. into a listed entity. He further elaborated that they were in the process of completing the relevant procedures for them to be listed on the Colombo Stock Exchange.

“The acquisition of Adam Carbons was funded by equity, which was Rs. 300 million, while an extra Rs. 150 million was borrowed on a long-term basis. Our plan now is to list the company maybe two years down the line and to repay the debt through the listing. We haven’t planned it as yet. We have to first earn profits and then execute the plan.”