am trying to read the judgement… just intimated to exchange
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Bit favoring right for SEZ factory…
Import of RPC/CPC by RAIN Carbon SEZ Unit
Import of RPC I CPC by the SEZ shall be permitted, subject to the
quantities as permitted for in their cTO/ CF’O, duiy lactoring in any
RPC sourced domestically by the sEZ Unit, strictly subject to the
following:
a. use of pet coke shall be permitted only as a feedstock / raw material
and under no circumstances to be used as fuel;
b. SOz emissions shall be managed and controlled through a flue gas
desulphu rizatron system, so as to comply with the standards of
emissions Prescribed;
c. continuous analysers for measurement of pM, Sox, NOx shall be
installed by the calciners in the stacks of processes where
waste/Process gases are used;
d.Regulationandmonitoringofsuchimportshallbeasperthe
guidelines of MoIIF&CC’s OM dated 1O’09’2018;
Page 9 of 10
w
e’ The sEZ Unit shall ensure time bound compliance of environmental
safeguarding measures as decided by the concerned authorities
from time to time;
f. Establishment of any new such cpc manufacturing unit in any SEZ
or capacity expansion of existing unit in the SEZ in question shalr
not be permitted.
11’ Strict compliance of para 10 of this orcler may be ensured through the authorities concerned in this matter.
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Regarding import of RPC for CPC manufacturing unit in SEZ
(DATED 09.10.2018 ON BEHALF OF RAl r cII CARBON (VIZAG))
"Learned,counsel for the applicant submits that initial of the other aspects being delegated to the commission, the facts of the
present case Commission,
the facts of the
present case be also examined by Commission itself.
This request is accepted and thus, the reliefs in this application
are also delegated for consideration before the Commission.
The application stands disposed of’"
even RPC import is increased for next year in general for industry.
ix. The Sub-Committee, recommended that the Commission may permit to
allocate the aforementioned quantities of RPC I CPC for import (total 1’9
MMT RPC for calcincrs anci 0.5 MM’,l’cPC for Aluminium Industry in the
year 2024-25 and. 1.9 MMT RPC for calciners and o’8 MMT CPC for
Aluminium Industry from 2025-26 onwards), subject to the certain
conditions.
Just went through the report thoroughly seems bit positive for Rain industries as allocation has increased in general + SEZ is permitted to import Rpc for export use. What are your thoughts on it?
1- Positive
2- Big Positive
3- Neutral (expected)
4- Negative
5- Big Negative
its big positive, They have used word CFO/CTO which mean as per Consent for Operation of SEZ Plant… That should mean as per capacity of the plant, is my assumption and if its right its Big Positive
Currently the plant was running at 40% capacity… anything additional adds to operational improvements.
Plus no one in India will get additional capacity license or industry in this field., So its jus one wait for next boom cycle in this industry like 2021.
Importing of goods or logistics will never become cheap unlike good old days of China,
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Also, They have own patented ACP which can be blended with GPC/RPC to produce CPC, it’s been already sent to Anode manufactures for the trials so even the allocation is low for GPC/RPC the yield of CPC will be high because of ACP getting mix with GPC/RPC that’s a GREAT advantage to Rain, the only point of concern is the growth it won’t come as they don’t encourage new capacity expansion in this Carbon segment so any growth in Rain industries has to come from Advanced Materials segment need to watch the growth of that segment closely.
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there is also USA ACP plants… That should start commercial supplying first…
I am writing this for myself, as I have not followed RAIN for a few years. As a refresher:
GPC = Green Petroleum Coke ( Raw material for CPC)
CPC = Calcined Petroleum Coke
RPC = Raw petroleum coke
note: GPC is the result of further processing of RPC
-
RPC is a solid carbonaceous residue produced during the distillation of crude oil in a refinery. It is a high-sulfur, high-carbon material with various impurities.
-
GPC is the result of further processing of RPC. It is produced by heating RPC to high temperatures in a process called thermal cracking or coking. This removes volatile compounds and excess sulfur, resulting in a purer form of carbon. GPC is lighter in color compared to RPC and has a lower sulfur content.
-
CPC is produced through a process known as “calcining” GPC, a porous black solid that is a by-product of the crude refining process. This process removes moisture and volatile matter from the GPC at a very high temperature.
If Oil Refineries [OR] process sweet crude, it would lead to the production of anode-grade GPC.But if Oil refineries process less sweet and/or use more sour crude, it would lead to lower production of anode-grade GPC [higher incentives for OR to process sour crude to generate better sales].
GPC is a by-product of the oil-refining process and is not produced to meet the supply or quality needs of CPC or aluminum producers.
Since there was lower anode grade quality GPC available and thus lower quality anode grade CPC, RAIN came up with Isotropic Coke Experiment tech, which led to the blending of grades of CPC (using non-traditional anode coke), which ultimately satisfied the aluminum industry customer.
In July 2018 SC banned the import of Pet coke to reduce pollution by burning it as fuel. RAIN used to import from its US facilities for Calcination and blending (see above).
Subsequently, in October 2018 order - limited the import of GPC by the calcination industry to 1.4 MT and the import of CPC by the aluminum industry to 0.5 MT.
“In India, we continue to work with regulatory authorities to gain relief from GPC-import restrictions for our new vertical-shaft calciner in the Andhra Pradesh Special Economic Zone, Visakhapatnam, as it is meant for catering to export markets.”
RAIN’s CPC plants are the only calcination facilities in India with continuous operating flue-gas desulphurisation (FGD) systems that remove 98-99% of our plants’ SO2 emissions and waste-heat recovery systems that enable our plants to generate clean electricity.
The Vertical shaft calciner is working only at 45% CU. They cant import CPC from the USA plants.
The Supreme court delegated further action on imports of Pet Coke to CAQM (Commission for Air Quality Management)
With this, coming to the Order from CAQM
(in my opinion, things which are material for our judgement in the broader scheme of things):
- Since conversion of RPC to CPC leads to emission of SO2 and given that aluminium industry can import CPC required for processing, why cause incremental pollution? Therefore, it’s not encouraged to promote further expansion of industries solely focused on calcining industries, due to their contribution to air pollution.
- continue with the cap on import of RPC/CPC.
- although there is an in crease in AL production by 25-26 from 4.249 to 5.09 mm tonne and the corresponding need of CPC would increase from 1.74 MMT to 2.1 MMT
- Commission may permit to allocate the aforementioned quantities of RPC /CPC for import total:
-
- Year 2024-25: 1.9 MMT RPC for calciners and 0.5 MMT CPC for Aluminium Industry
-
- Year 2025-26 onwards: 1.9 MMT RPC for calciners and 0.8 MMT CPC for Aluminium Industry.
Specifically for our company:
- Since RAIN has a plant in the Special Economic Zone (SEZ). Even though its in SEZ, it might not be an environmentally desirable proposition. however RAIN’s unit in question abides by all the rules regulatory clearances and permissions.
- Emission standard that has been released in June 2023, will come in to effect by June 2025, but RAIN’s unit is already in compliance with the emission norms even on date.
- in addition they have FGD installed and treats SO2 emissions with 98% efficiency and no Ash generated. Thus they can NOT stop operations and denied any rights in the AP SEZ area.
- import of RPC/CPC by Rain’s SEZ Unit shall be permitted as per their CTO ( given it satisfied those 6 stipulations, which in my opinion, they are already compliant)
- no one new can set up a CPC manufacturing unit or expand capacity - net net a moat for RAIN.
This overall seems very positive for the company.
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I have one confusion when it say ‘CTO/CFO’ - is it Rain’s CFO or AP SEZ CTO/CFO? or any other means?
its Rain CFO. order was mentioned for RAIN plant only.
thank you for the write up, the step by step points makes it easy to understand for new investors…
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“Import of RPC/CPC by the SEZ shall be permitted, subject to the quantities as permitted for in their CTO/ CFO duly factoring in any RPC sourced domestically by the SEZ Unit.”
This is specifically called out under Rain’s SEZ ‘header’. In my opinion, it is specifically for RAIN’s unit.
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Rain industry, in FY2023 results they have a expence item Impairment loss of 750.6 Cr (i.e. non-cash impairment charge towards Goodwill)
What this mean? (just trying to understand why this expense item occur? and whether this effect the company cashflow or not? and what are the future implication of this expense?)
Impairment charge is analogous to depreciation for Goodwill items. Since the cost of capital has increased due to rising interest rates, company believes the fair value of its cash generating units have decreased. Thus a non cash impairment charge is taken i.e assets decreased by that amount and is expenses in p&l statement.
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so if in future the interest rates goes down what will happend? (will the Goodwill items regain its fair value)
As I understand this, they have impaired the CGU and as the CGU has goodwill, goodwill is the first category within CGU to be impaired.
And the goodwill impaired cannot be reversed upon reversal of Impairment.
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I think its good time to re enter this stock after recent results and court order