GHCL to set up a state-of-the-art soda ash manufacturing capacity of 0.5 MTPA with an outlay of Rs 4,000 cr

GHCL’s ambitious plant aims at sharing the new script of India’s new growth

story in its energy transition goals

BILKULONLINE

Ahmedabad, Feb 3: In order to meet the growing needs for soda ash in India

GHCL has committed an ambitious Greenfield project with an outlay of Rs 4,000 crore, to set up a state-of-the-art soda ash manufacturing capacity of 0.5 MTPA.

Sharing the GHCL’s growth trajectory and future plans it’s Managing Director, Ravi S Jalan said “GHCL’s ambitious plant will not just script India’s growth story in its energy transition goals through self-reliance but also generate direct and indirect employment for at least 50,000 people. It will also encourage establishment of micro small and medium enterprises (MSMEs) in the logistics, transportation and packaging material segments in the plant’s vicinity”.

GHCL, established in 1983, is a well-diversified company with a market capitalization of about Rs 4,800 crore [As on February 1, 2023/ BSE India]. The company has two key business verticals: Inorganic Chemicals and Textiles.

On the lines of the MoU signed with the Government of Gujarat during the Vibrant Global Gujarat Summit (VGGS) 2017, GHCL has committed an ambitious Greenfield project with an outlay of Rs 4,000 crore, to set up a state-of-the-art soda ash manufacturing capacity of 0.5 MTPA.

India which represents merely 6% of the total soda ash manufacturing global capacity, also has a magnified focus on green energy transition. This will amplify the requirement for soda ash – a key raw material in manufacturing solar glass. At the same time, the push for increasing adoption of electric vehicles will also drive the demand for Soda Ash – which is used to process lithium ore for producing lithium carbonate. Additionally, soda ash derivate product sodium bicarbonate is used in treatment of industrial flue gas treatment (FGT), which has the potential to grow in future with increasing adoption and growing environmental concerns.

Taking India’s green energy targets into account, India alone will see soda ash demand to grow to 6.0 MTPA by 2030. Here, it is important to look at the demand-supply scenario. At this pace, India is expected to remain a net importer of soda ash, unless fresh capacities are announced, which are inevitable to support the country’s growth agenda.

Between 2023 and 2030, India only has one major capacity enhancement announced. With demand expected to increase furthermore, this makes the country even more dependent upon imports from other countries such as China and Turkey.

Jalan while giving more details about the company emphasised that “Being the second largest manufacturer of anhydrous sodium carbonate (Soda Ash) in India with a nearly four-decade-long presence here, GHCL fulfils about 25% of the country’s total annual demand for Soda Ash, through its plant at Sutrapada in Gujarat. The plant has an installed capacity of 1.2 million tonne per annum (MTPA) of soda ash. Besides, it also has a backward integration of limestone, lignite mines and salt works with a vast presence in both Gujarat and Tamil Nadu.

Over the past two decades, the company forayed into the spinning business, which has expanded to 2.25 lakh spindles. The firm also has 47MW of renewable energy capacities, including wind and solar which caters to ~75% of its energy requirements at the spinning business.

In a span of 12 years from 2010 to 2022, GHCL’s revenues grew 3.5x to over ₹ 4,000 crore, while its profits before tax (PBT) has grown by 7x to over ₹ 800 crore, during the same period. At the same time, the company’s debts have reduced by ₹ 1,400 crore and now it is a net-debt free Company with surplus cash.

Soda Ash – a global perspective and India story

Soda Ash is the 10th most consumed material globally and till date has a wide range of applications in manufacturing of detergents, glass, silicates and chemicals among others. Globally, the installed capacity for manufacturing Soda Ash stands at 71 MTPA, using which 63 MTPA is produced, with China being the largest producer accounting for around 45% of the total global production volume. The US and Europe combined account for 40% of the global capacity.

The demand for Soda Ash has grown at 2-3% every year across the world. Against this, the demand in India has grown by 5% every year. In the fiscal year 2021-22, the soda ash demand in India stood at 4.1 MTPA, of which roughly 70% comes from detergent and glass industries. However, ~20% of India’s soda ash demand is met from imports, underlining the need for enhanced domestic capacities on the lines of Atmanirbhar Bharat.

Mentioning the commitment of his company Jalan pointed out that “GHCL is committed to establish this plant with ultra-modern technology with a focus on carbon neutrality and by exploring use of green energy resources. The setting up of the plant will invariably be accompanied by GHCL’s commitment to support the community nearby with best-in-class CSR and sustainability initiatives”.

Setting up a Soda Ash plant is capital intensive and takes a long time. However, to meet the growing needs for soda ash in India, domestic capacity additions are inevitable. Soda Ash is manufactured from raw materials like salt and limestone, which are natural and non-toxic. Treated effluents discharged into sea are also non-toxic, which are compatible with sea body system and helps stabilize sea-shore against erosion.

Jalan stated that his company followed the three important norms of ‘trust-ownership-integrated team work’ . 

Raman Chopra the CFO & Executive Director  Finance of GHCL Limited and N N Radia the Chief Operating Officer for GHCL’s Soda Ash division were present at the occasion to share the information.