Tata Chemicals weighs salt unit buy, expansion

Tata Chemicals plans to acquire salt manufacturing units as its plant is functioning at optimum capacity, Satish Sohoni, chief operating officer, food additives unit, said.

The company, which manufactures Tata Salt and soda products, also plans to foray into new food businesses, he said.

Besides, the company awaits the response to its recent foray in the overseas markets and launch of salt in 100-gram sachets, Sohoni said.

"We are looking at acquisitions within the country," Sohoni said in an interview. "We may buy salt manufacturing units as there are not many brands available for acquisition."

Currently, Tata Chemicals produces 2.2 million tonne of salt per annum at its plant in Mithapur, in Gujarat's Jamnagar district.

Of the total output, 560,000 tonne comprises edible salt, while the rest is used in industrial applications like soda ash.

He said the Indian salt market, worth around Rs 3,000 crore, is poised for robust growth with the rise in population.

Sohoni said both iodised and non-iodised categories are growing, but the price gap between the two segments is narrowing down.

Tata Salt, which enjoys 52 per cent market share in India, started exporting salt under 'Tata Top' brand to West Asia, Singapore and Yemen around six months ago, Sohoni said.

"Though we're still evaluating our future plans for the export markets. So far, the response has been encouraging from the countries we've started with," he said.

He said the company would be in a position to chalk out concrete strategies for the overseas markets in the coming six months.

Tata Salt is currently exporting iodised as well as non-iodised salt, Sohoni said, adding that the formulations vary for the various foreign markets.

He said the company is also trying to gauge the response to its recently launched 100-gram salt sachets costing 1 rupee each. Tata Salt has launched the sachets in select markets of Madhya Pradesh, east Uttar Pradesh and Bihar.

"We have not launched sachets in bigger markets""as in big cities, the demand is gradually shifting towards one kilogram packets. However, we identified the need for sachets in select markets," he said.

Being the market leader in salt, the Tata group firm also sells certain soda based food products, primarily in India's western and eastern markets.

"We also plan to enter other areas of food business," he said, declining to detail the company's plans.

Currently, the food additives business unit of Tata Chemicals contributes 15 per cent to Tata Chemicals' topline, Sohoni said. "With our recent forays in the overseas markets, new segments, and plans of acquisitions, growth of the division (food additives) will be good," he said.

Tata Chemicals also hopes to increase its market share. "We already have a 52 per cent overall market share, with 23 per cent in the iodised category, and we hope the market share rises further," he said.

Tata Salt is the market leader in the segment, followed by Nirma, ITC Ltd's Aashirwad, Hindustan Lever's Annapurna and Captain Cook.