By IANS
Ahmedabad : Tata Chemicals Ltd (TCL), part of the $28-billion Tata group, Tuesday said it has acquired the soda ash business of US-based chemicals giant General Chemical Industrial Products Inc (GCIP) for $1.005 billion.
GCIP’s subsidiary, General Chemical (Soda Ash) Partners (GCSAP), is a significant soda ash producer in the US with a capacity of producing 2.5 million tonnes every year.
The acquisition will make TCL 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.
GCSAP has mining and manufacturing facilities at Green River Basin in Wyoming, some 280 km northeast of Salt Lake City, which provides it access to the world’s largest and most economically recoverable trona ore deposits that is converted into soda ash.
GCSAP has been producing soda ash for more than 100 years and is currently among one of the top five global producers.
The decision of TCL 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.
TCL, established in 1939, manufactures inorganic chemicals, fertilisers and food additives. Last year it recorded a consolidated turnover of close to Rs.60 billion ($1.52 billion).
TCL’s chemicals businesses account for 56 percent of its global revenues and the fertilisers business contributes the remaining 44 percent.
With the soda ash business accounting for nearly 40 percent of TCL’s consolidated revenues, it is currently one of the world’s largest soda ash producers with a combined capacity of 2.9 million tones per annum.
When the deal with GCIP goes through, TCL will add 2.5 million tonnes a year to its capacity.
TCL had in 2005 bought Britain-based Brunner Mond Group Ltd (BMGL), raising its soda ash capacity to about three million tonnes, accounting for eight percent of the global market.
The company has four soda ash facilities. In India, its soda ash unit is located at Mithapur in Gujarat, the largest in the country with a capacity of producing 875,000 tonnes a year.
Overseas, its facilities are located at Northwich in Britain, in the Netherlands and at Lake Magadi in Kenya. The facilities outside India were acquired as a part of the BMGL buyout.
The company is also considering increasing its domestic soda ash manufacturing capacity to 1.2 million tonnes a year.
TCL’s fertiliser plants are located at Babrala in Uttar Pradesh and Haldia in West Bengal.
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.