Gujarat Heavy To Boost Soda Ash Capacity

Gujarat Heavy Chemicals Ltd (GHCL) plans to expand soda ash capacity in the country by 2,50,000 tonnes per annum (TPA). The expansion is likely to be completed in FY10.

A source said the feasibility study for this additional capacity has already started.

Sanjay Dalmiya, chairman, GHCL told DNA Money, “We have plans to increase our soda ash capacity, but everything is on the drawing board at this stage. Once the complete plan is chalked out, we will be able to talk or give details.”

GHCL’s soda ash plant produces both light and dense soda ash. The expansion will be in dense soda ash, where the demand from glass manufacturers, automobile & construction segments is high.

Prices of soda ash have hardened since April 2007 as most of the plants had shut down following heavy rains in Gujarat. Imports from China, on the other hand, were subdued due to an increase in demand in that country. Consequently, there is a shortage in the domestic market.

Most manufacturers have increased prices twice since then, once in July by Rs 700 per tonne and then in October, by Rs 1,400 per tonne.

GHCL’s total soda ash capacity is at 1.15 million TPA - 8,50,000 TPA in India and 3,00,000 TPA abroad through the plant of S C Bega Upsom in Romania, which it acquired earlier.

Analyst Daljeet S Kohli of Emkay Research said in a note to clients that demand for soda ash from the major consumers will be stable.

Automobile and construction sector (flat glass) will be the key drivers of demand going forward. Besides, being the only company in India to have captive lignite mines, GHCL has uninterrupted supply of the raw material and little threat of external pressure on prices, he said.

600450 Gujarat Heavy To Boost Soda Ash Capacity

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