Vikram Handa is the Managing Director of Epsilon Carbon, a leading manufacturer of carbon chemicals and India’s only backwards-integrated company with a fully dedicated source of raw materials, which he founded in 2010. He founded Epsilon Advanced Materials (EAMPL) in 2019, which is an upcoming global supplier of Synthetic Graphite Anode materials for use in producing Lithium-ion battery materials. EAMPL has a vision of vertically integrating to manufacture synthetic graphite anodes in India and be a preferred supplier to global cell manufacturers.
What was the idea behind setting up an anode material factory?
For the last six years, we have been in the coal tar distillation business. Coal tar is a by-product of the steel plant, but it has a lot of carbon content. We have been manufacturing various products out of coal tar, mainly servicing the carbon black and aluminium industries.
But with recent technology advancements in Japan, China and Korea, we’ve seen people using coal tar to go downstream and take advantage of the carbon to manufacture anodes for lithium-ion batteries. We also saw raw material availability growing in India.
Hence, about two years ago, we started to identify what else can we explore going downstream and add more value addition in India itself.
China is the leading supplier of anodes. They are also the largest importers of coal tar raw materials globally. How do you analyse this scenario? And how can you help the EV manufacturers in India?
On the anode side, it is quite interesting because all Gigafactories globally are dependent on China. China does not necessarily have all the raw materials, but they’re able to import raw materials and process them to make anodes.
We see this as an advantage, as the world is looking for anode solutions. We want to be the hub for processing anode and provide battery mineral to battery makers in India. I think India has the capacity to grow in material processing. This is the reason we believe that processing anodes are natural forward integration. With this, we would be able to help the Indian cell industry by providing them with locally manufactured anode.
What kind of business opportunity do you see in the next two to three years for battery materials?
We are currently looking to build our business on an export model, until India’s demand gets created. Many companies are in discussion with us to set up cell manufacturing plants in India. In the next three-four years, we aim to produce 30,000 tonnes of anode material per year. This will be a good size capacity to be able to cater to any gigafactory. Just to give a perspective, about 1,000 tonne of anode material is required to produce 30 GWh (gigawatt hours) of electric power.
Are the government policies supportive for manufacturers like you?
NITI Aayog has drafted a good policy on the Advance Chemistry Cell (ACC) Scheme to attract investment, but it is limited to cell manufacturing. When cell manufacturing comes to India, the anode, cathode, and other raw material producers will also follow.
In terms of state policies, Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh are focused on charging infrastructure and R&D on two- and three-wheelers. These states have good policies, but investments are not really coming in.
We are talking to the government, and they are very forthcoming to hear that this raw material ecosystem should also be put under some kind of PLI scheme. It is not only graphite anodes but also cathodes, lithium, nickel, manganese, cobalt etc. These should get processed in India and exported. And when there’s demand in India in the next four to five years, an ecosystem will be ready on the back of strong exports. So, overall policy is good but it needs some tweaking.
Why did you choose Karnataka as your manufacturing base for anodes?
In Karnataka, a lot of coal tar is available because of the presence of the steel industry. We have an integrated complex – our coal tar distillation, carbon black plant and distillation facility. They share many utilities and raw material by-products, and this helps us bring our costs down. We are exporting to China, and are still cost-competitive compared to a local manufacturer in that country. That gives us the belief that we have a very good model with a low carbon footprint, which can help scale up the business.
Does that mean Indian anodes will be price competitive against Chinese alternatives?
Any Gigafactory coming up in India today will have no option but to buy from China. Even the Gigafactories that are coming up in Europe are going to source from China initially, because there is no ecosystem in Europe today. Europe is building about 500 GWh of capacity, which equals to 500,000 tonnes of anode material. That is where I think, as a company, we are very well positioned to offer them an alternate solution.
Talking about your business, particularly Epsilon materials, what kind of investments have you ploughed in so far? How do you see the next two to three years for your business?
We have already invested about INR 50 crore ($8 million) this year, and will invest INR 300 crore (about $42 million) next year. In total, we aim to process 100,000 tonne of graphite anodes, requiring an investment of about $800 million over time. This investment will be done in eight years. Currently, we have one plant in Karnataka, and we are scouting for another location in India to build an additional facility.
By when is the facility likely to come up?
By 2025, we want to be at about 40,000 tonnes a year, and by 2030, we want to be at 100,000 tonnes a year. We are the first company in India to do this. When the Gigafactories come, they will welcome the fact that there is already some local supplier that is established, qualified and available in India.
Do you think India can become the ‘EV hub’ of the World?
I feel there is a lot of EV adoption happening in India, especially in the two- and three-wheeler segments. As a result, you see much demand for battery packs. You will see a lot more people setting-up battery pack manufacturing units in India, but again, they are importing cells and making battery packs. Somebody needs to set-up cell manufacturing in India, and that will bring down the cost. EV adoption will be a little slow in the next two to three years, but right after that, it will be exponential.
Do you also see Gigafactories coming to India, when cells start getting manufactured in India?
I think some companies will bid for NITI Aayog’s Advanced Chemistry Cell (ACC) scheme that subsidises cell manufacturing, since they talk about raw materials. People are really evaluating technology tie-ups to understand what is available in India. I think Gigafactories will come; they might start small with one or two GW initially and scale to five GW and 10 GW over time. They might not immediately come with 30 GW capacities.