Tata Chem to increase urea, soda ash capacity

Tata Chemicals plans to raise production capacity of urea to 1.2 million tonnes (mt) per annum by September from 865,000 tonnes, Managing Director Homi Khusrokhan said on Tuesday.

The company also plans to raise its soda ash capacity to 1.2 mt from the current 875,000 tonnes, he told reporters on the sidelines of an industry meet.

Shares of the company touched an intraday high of Rs 392 on the news of capacity expansion. The shares closed at Rs 387, up 3.6%, on the Bombay Stock Exchange.

The company's expansion programme will be taken up by de-bottlenecking of the Mithapur, Gujarat, plant for soda ash and the Babrala, Uttar Pradesh, unit for ammonia.

Khusrokhan said the company's soda ash plant in Kenya, which currently operates at 60% capacity, will start running on full capacity by June.

"We will raise the capacity of the Kenya plant by 15-20% after June," he said without giving the investment figure.

Khusrokhan said the company was not looking at any greenfield expansion immediately.

Tata Chemicals is also planning to set up its bioethanol refinery with a capacity of 30 kilolitres (kl) per day, much lower than the norm of 100 kl per day, he said.

The company has also bid sick sugar units in Bihar. "If we get control of those mills, they will eventually be used for expanding ethanol capacity."

Khusrokhan made a case for higher output of fertilisers and biofuel in the country. "Maybe the fertiliser makers will have to be competitive at a gas price of $4.5 per million British thermal unit."