By IANS
Ahmedabad : Detergent maker Nirma Ltd announced Tuesday that it would buy US-based soda ash producer Searles Valley Minerals (SVM) for an undisclosed sum.
When the deal is wrapped up, Nirma would lead the producers’ market in soda ash (sodium carbonate), a key ingredient to make soaps and detergents.
SVM’s annual production is 1.9 million tonnes. Nirma’s existing manufacturing capacity is one million tonnes.
Soda ash is a high-volume, low-value product and finds application in production of detergents, glass and chemicals.
Besides Nirma, there are four soda ash producers in India – Tata Chemicals (0.875 million tonnes capacity), Gujarat Heavy Chemicals Ltd (0.6 million tonnes), DCW Ltd (0.096 million tonnes) and Tuticorin Alkalis Chemicals & Fertilisers (0.115 million tonnes).
Nirma expects the acquisition to boost annual revenues to more than Rs.35 billion, according to company sources.
Competition in the sector is mainly price based. Soda ash constitutes about 25-30 percent of the domestic chlor-alkali market.
SVM is the only US producer of soda ash, sodium borates, boric acid and sodium sulphate. SVM has three manufacturing facilities located at Argus, Trona and Westend, all in California.
The Argus facility manufactures soda ash, the Trona facility produces boric acid, anhydrous borax and borax decahydrate, and the Westend facility produces sodium borate pentahydrate, sodium sulphate and sodium chloride.
The major gain for Nirma is that SVM owns some of the required mineral reserves and also produces from long-term leases with the US Bureau of Land Management.
Its total mineral reserves are in excess of 600 million tonnes, sufficient for 300 to 400 years of production at current levels.
India’s soda ash manufacturing capacity from synthetic processes is at 2.7 million tonnes, equivalent to 6.7 percent of world’s capacity.
Since 2001, the industry has been growing at a compounded annual growth rate of 11.3 percent.