By IANS
Ahmedabad : Tata Chemicals Ltd, part of Indian business conglomerate Tata group, said Tuesday it would buy US-based soda ash maker General Chemical Industrial Products Inc for $1.005 billion.
The acquisition will make Tata Chemicals the world’s second largest soda ash maker, according to industry estimates.
Soda ash or sodium carbonate is a key industrial raw material for making glass, soap, powdered detergent, paper, textiles and even some foods.
The US firm is currently among one of the top five global producers. Its plant is located 280 km northeast of Salt Lake City in Wyoming state in the US. It has been producing soda ash for more than 100 years.
The decision of Tata Chemicals is in line with the strategy adopted by Indian soda ash making companies to bolster their production capacities through acquisitions abroad.
Recently, Ahmedabad-based Nirma Ltd announced its decision to acquire US-based Searles Valley Minerals (SVM), which has a production capacity of over 1.9 million tonnes. The acquisition made Nirma the world’s seventh largest producer of soda ash with a combined capacity of nearly three million tonnes.
GHCL Ltd, another Gujarat-based company, had acquired in 2005 two soda ash making companies in Rumania.
Tata Chemicals had in 2005 bought Britain-based Brunner Mond group, raising its soda ash capacity to about three million tonnes, accounting for eight percent of the global market.
Tata Chemicals soda ash plant is located in Mithapur in Saurashtra region of the state. It has a capacity to produce 875,000 tonnes a year.
When the deal with US Company goes through, Tata Chemicals will add 2.5 million tonnes a year to it capacity.
The company is also considering increasing its domestic manufacturing capacity to 1.2 million tonnes a year.
Established in 1939, Tata Chemicals manufactures inorganic chemicals, fertilisers and food additives.
The Tata group in the recent past made a number of significant acquisitions including the $13.7 billion acquisition of Anglo-Dutch steel maker Corus in January 2007.
Tata Motors is reported to be preparing for an outright purchase of British brands Jaguar and Land Rover from the Ford Motors for about $2 billion.
The Tata group has said its overseas expansion plans focuses on eight countries including the US, Britain, Singapore, South Africa, the United Arab Emirates, South Korea, China and Bangladesh.