Financial Times

Haycarb eyes recovery with low-cost raw material imports
Haycarb, the Hayleys subsidiary making coconut shell charcoal-based activated carbon, is shipping used carbon from Thailand for re-activation in Sri Lanka to save shipping costs as it struggles with raw material shortages.
The company, which is expanding overseas to reduce reliance on local raw materials, also hopes to have new coir fibre and rubberised coir mattress facilities in China and Indonesia operational by early next year, Hayleys chairman Rajan Yatawara said.Local shortages of coconut shell charcoal, the raw material required to make activated carbon, has forced the firm to operate at 50 percent of capacity and import charcoal at high cost to maintain markets.

Yatawara said Haycarb expects to make a recovery from a poor first quarter with low cost supplies of carbon from its new plant in Sulawesi, Indonesia.“At Sulawesi we’re now operating one kiln,” said Yatawara. “That’s giving us some savings. We’re sending charcoal to Colombo for activation. That enables us to make savings on freight.”

Haycarb, the first activated carbon manufacturer in any coconut producing country, recently acquired an existing carbon production facility, PT Mapalus Makawanua Charcoal Industry in Indonesia, with an investment of over Rs 200 million.

The factory has three kilns and enjoy tax concessions and incentives offered by Indonesia’s Capital Investment Coordinating Board.

Haycarb made a loss of Rs 64.8 million in first quarter ended June 30 compared with a profit of Rs 36.7 million in the same quarter last year because of sharply higher raw material costs caused by a drought-induced crop shortfall.
Turnover fell 17 percent to Rs 557 million from Rs 674 million over the same period.

The second quarter results are expected to be announced soon.
Yatawara has said Haycarb intends to maintain its position as the world’s largest coconut shell based activated carbon supplier. “We’re importing charcoal at very high cost to keep our markets,” Yatawara said.

The firm has entered into a long-term supply agreement with Calgon Carbon Corporation, USA, for the supply of activated carbon to the USA, and is expanding its overseas presence.

Haycarb now has three fully operational production plants - one in Thailand and two in Sri Lanka – and plans to add two plants in Indonesia and eventually increase its existing production capacity of 17,000 tonnes a year by over 10,000 tonnes. Haycarb Group currently accounts for 16 percent of the annual global activated carbon production of around 100,000 tonnes.

Activated coconut shell carbon is used in the gold mining industry to recover gold from ore, as well as in air and water purification areas such as gas masks, protective military suits, cigarette filters, odour removal and tap water filters.
Some 600,000 tonnes of activated carbon – made from coal, coconut shell and wood - is manufactured globally.

Yatawara also said Haycarb’s new overseas facilities in China and Indonesia are expected to be operational by next February. “The fibre plant in China, which also makes rubberised coir mattresses, should be in production in February. Our fibre plant in Indonesia should also be in production by February.”

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