Tata Chemicals to buy US firm for Rs 4,000cr

Tata Chemicals (TCL) has signed definitive agreements to acquire US-based soda ash maker General Chemical Industries Products Inc (GCIP) for $1.05 billion (about Rs 4,000 crore) to become the second largest producer of soda ash in the world.

The announcement was made exactly a year after Tata Steel, another Tata group company, acquired British steel major Corus.

TCL is now the third largest manufacturer of soda ash and sodium bicarbonate in the world with a production capacity of close to 3 million tonne per annum (MTPA). The acquisition will add another 2.5 MTPA to take its total capacity to 5.5 MTPA - next only to US-based FMC Chemicals.

The company had bought 63.5% stake in UK-based Brunner Mond Group for about Rs 508 crore in December 2005. It also holds a 33% stake in Indo Maroc Phosphore S.A. (IMACID), Morocco, which is engaged in the manufacture of phosphoric acid.

Soda ash contributed 40% of TCL's revenues of Rs 4,563 crore for the first nine months of 2007-08. The rest of the revenues are from its fertiliser and inorganic chemicals businesses.

"This is a historic occasion for Tata Chemicals. The acquisition will help us access markets in North America, Latin Americ and the Far East," said Homi Khusrokhan, managing director, TCL, at a press conference in Mumbai today.

GCIP's subsidiary General Chemical (Soda Ash) Partners (GCSAP) has mining and manufacturing facilities located at Green River basin in Wyoming, USA. The Green River basin is the largest and most economical natural soda ash mine (trona) in the world. GCSAP shares the Green River basin with three other producers of soda ash, OCI Chemical Corporation, FMC Corporation and Solvay Mineral.

TCL signed an agreement to acquire 100% equity of the privately held GCIP from Herbinger Capital Partners, a private equity player with majority shareholding. The acquisition, subject to US regulatiory clearances, will be done through debt and equity funding, said TCL executives.

A profit-making and debt-free company, GCIP is estimated to have a turnover of over $400 million, said TCL executives.

The Gujarat-based soap and personal care producer Nirma had acquired Searles Valley Minerals (SVM), one of the top five producers of natural soda ash in the US with a turnover of $ 300 million, in November 2007.