Nirma To Up Soda Ash Capacity By 50%

Detergents major Nirma has decided to increase its licensed soda ash capacity by over 50 per cent from 4.2 lakh tonne per annum to 6.5 lakh tonne per annum. The expansion will entail a capital investment of Rs 110 crore.

The expansion is expected to be completed by December 2002, the company said. The capex will be met through debt and internal accruals.

Soda ash is the key ingredient in detergents manufacturing, and Nirma is the leader in detergents with a marketshare of around 40 per cent. The size of the organised detergent industry is about 23 lakh mt, primarily divided into three categories, premium, popular and economy.

There are four manufacturers of soda ash in the country, with an installed capacity of approximately 2.2 million tonne, of which Nirma accounts for almost one-fifth.

For the year-ended March 2001, the company's turnover increased 41 per cent to Rs 2,052.07 crore. However, the post-tax earnings inched up just 7 per cent to Rs 249.71 crore.

In 1999-2000, Nirma had commissioned the first stream of 4.20 tonne per annum soda ash plant at Bhavnagar. The second stream of plant was commissioned in September 2000. During 2000-01, the company produced 2.05 lakh mt soda ash during the year.

Nirma has posted an increase of 41 per cent in detergent sales volume with sales of 8.66 lakh mt during 2000-01 compared with 6.15 lakh mt during the previous year. However, the sales value growth of detergents has been 37 per cent during the year, due to a drop in realisation by 4 per cent.