Part 1 : 

Executive Summary

Thai Carbon Black Public Co., Ltd. (TCB) has been established in 1978
and started production in 1980 as a Joint Venture between the Aditya
Birla Group of India and local Thai Investors to manufacture Carbon
Black with a production capacity of 16,000 Mt/year which has been
expanded many folds to the current installed capacity of 185,000 MT/year
and with debottlenecking and improvement in production process, the
company is currently producing approx 205,000 - 210,000 MT/ year. TCB
has last expanded its capacity in Quarter 4 of 2005. During the year
2006 the company has recorded ever highest profit of Baht 932 million

During the year the subsidiary company in china namely Liaoning Birla
Carbon Co., Ltd. (LBCC), in which the company holds 77% equity had
increased its capital by RMB 78.56 million for better operational
flexibility and efficiency, loan repayments, working capital
requirements and to meet operational expenses etc. The company will
subscribe the 100% of the increased capital of RMB 78.56 million and
after this the company’s shareholding will be increased to 88.54%.

Presently the subsidiary company is focusing on operational efficiency,
approval of its products from MNC’s, cost outs and optimization of
product mix.

During 2006 the subsidiary company had incurred loss of RMB 34.90
million (Approx Baht 166 million). Going forward, the subsidiary company
is expected to improve operational efficiency, considerably increase
market share and sales on expanded capacity and expected to generate
profit.

As part of its growth plan to grow in the Carbon Black business, the
company has decided to explore possibilities of setting up the Carbon
Black plant in Mexico. A subsidiary company has been formed in Mexico
namely “Birla Carbon Mexico S.A”. to carry out various initial
activities like land purchase and acquisition, discussions /
negotiations with various government agencies and environmental
clearance etc. The initial capital of the company was Mexican Peso
50,000 MX CY which has been subsequently increased to 2,050,000 MX CY

During the year the company has also decided to explore the possibility
of setting up a Carbon Black plant in Oman and to carry out various
initial activities like land purchase and acquisition, discussions /
negotiations with various government agencies and environmental
clearance etc.

The company is also working for setting up a JV company in Oman along
with local partner for setting up Carbon Black Plant.

During the year the company has continued its journey of performance
excellence in all spheres of operations and have won the following major
awards:-

-   SET Award - 2006 – Nominated for Best Performance company in
    Industrial category

-   BVQI Award – 2006 – for Excellent Performance on quality, safety and
    Environmental safety systems.

-   One of world’s best 200 small companies under a billion for the
    5^(th) time

-   To Be Number One Project Award – 2006 – Regional level winner and
    top 10 in Thailand from HRH Princess Ubolrat Rajakanya.

The company will continue to strive for improving the quality of its
product and services to customers and innovation in its process and for
the satisfaction of its stakeholders.