Tata Chem buying 600 acres for Gujarat soda-ash unit expansion

Tata Chemicals (TCL), a part of the $28.8-billion Tata Group and the world’s second largest manufacturer of soda-ash, is planning a massive expansion near its chemical complex in Mithapur region of Gujarat for an investment of Rs 700-1,000 crore.

The company is in the process of acquiring 600 acres near its existing facility in Gujarat. “Of the 600 acres, only 24 acres is wasteland given by the government, while the remaining portion is private land that is being bought by the Tatas at current market rates,” said government sources close to the development.

The company is planning to ramp up its soda-ash and salt capacity at the proposed new facility. Earlier, TCL had pumped in Rs 300 crore for the modernisation and upgradation of the Mithapur facility. Currently, TCL has a capacity to produce 8.25 lakh of soda ash and about 5 lakh tonnes of salt annually.

Recently, the state government had sought land records in Dwarka taluka for land acquisition by the Tatas. TCL already has the necessary infrastructure in place, including raw material, water and a 65 MW captive power plant.

Industry watchers also feel that the expansion could partly be for a glass manufacturing unit that the company is mulling near Sanand, for which Rs 1,000 crore has been invested.

The glass from this unit will also be used for its Nano car, in which the glass component is about 30 per cent in its surface area, said industry sources.

One of the basic raw materials for glass is dense soda ash. The acquisition of US-based General Chemicals in 2008 have taken the company’s overall soda ash capacities to 5.5 million tonnes, making it the second largest global producer of soda ash after Solvay.

Despite reversal in the global commodity cycle, a relatively tight-demand supply balance has kept global soda ash prices relatively firm. Global soda ash prices are at $270-300 a tonne levels, about 10 per cent higher than the year ago rates and a further increase is expected in 2009, according to industry sources.