Rain Industries' subsidiary to shut down one CPC kiln at Vizag plant; Stock dives 4%

6 Apr 2022 , 09:20 AM

Rain CM Carbon (Vizag) Limited (“RAIN”), a wholly owned subsidiary of Rain Industries Limited is engaged in the business of manufacture and sale of Calcined Petroleum Coke (“CPC”) and co-generation of electricity through waste-gases supported by emissions scrubbing at Visakhapatnam, Andhra Pradesh. RAIN has two Kilns for manufacture of CPC at this location.

RAIN is a unique calciner in India as its Kilns are the only ones in the country equipped with Flue Gas Desulphurisation (FGD) systems that effectively reduce Sulphur Dioxide (SO2) emissions by more than 98%, making RAIN’s calcination Kilns the cleanest in India, a fact that has also been confirmed by a renowned Independent Environmental Agency in India (CSIR-NEERI Report dated September 2021).

With co-generation of electricity from its cleaned waste gases, India’s SO2 and other Emissions are further reduced to negative levels on a net basis, as it reduces the requirement for other power plants to burn additional coal / fossil fuel for generation of an equivalent amount of power.

Raw Petroleum Coke (“RPC”) is the main raw material for manufacture of CPC. RPC is a restricted item for imports and the Directorate General of Foreign Trade (“DGFT”) allocates RPC to RAIN and other Indian calciners on an annual basis.

Due to a lower allocation of RPC by DGFTforthe Financial Year 2022-23 [RAIN is facing RPC shortfall to the tune of 40%] than in the previous years, the lack of sufficient raw materials has now reached a level necessitating that RAIN shuts down one Kiln, until further notice. Apart from CPC, the shutdown of RAIN’s Kiln will also result into net loss of 20 MW of waste-heat power generation to the grid.

Upon re-allocation and/or fresh allocation of RPC by DGFT, RAIN will resume operations of the idled Kiln.

At around 9:22 AM, Rain Industries was trading at Rs195.85 apiece down by Rs8.9 or 4.35% on the BSE.