GHCL likely to buy Romanian company

GHCL (formerly Gujarat Heavy Chemicals) is considering acquisition of Romanian soda ash maker Uzinele Sodice Govora (USG). This transaction, once materialised, will be GHCL's second buyout in that country after its takeover of a 3 lakh tonne soda ash company, S C Bega Upsom SA, in December 2005.

USG, a 2 lakh tonne soda ash producer, has mortgaged its assets with GHCL to tide over its financial crisis.

The proposed acquisition is part of the company's target to quadruple its capacity to 4 million tonne by next year. According to the world's pecking order of soda ash makers, a 4 million-tonne company should rank second in the list.

"We are also in talks with soda ash companies in China and the US. The talks are likely to be over by June," Chairman Sanjay Dalmia said.

"Asia is a big market and the Chinese acquisition will help us emerge a big player in Asia," he said.

Soda ash is primarily used by the soap and glass manufacturing industry. In addition to soda ash, GHCL was also eyeing acquisition of home textile retail chains in Europe and the US to become an integrated home textiles company with presence across spinning, weaving, designing, sourcing and distribution, he added.

In the last one-and-a half years, GHCL has spent about $165 million ( Rs 730 crore) on foreign buyouts. The list includes UK-based largest home textile retail chain company Rosebys with 300 stores, and the US-based textiles company Dan River.

The company plans to source manufactured textile items from China, Pakistan and India and sell them as brands in these retail outlets.

With all these acquisitions, GHCL's turnover is estimated to close in on the Rs 4,500 crore mark by 2008-09, compared with last year's Rs 821 crore, the chairman said.