UAE company in tie-up talks with Gujarat Alkalies

Proposes to set up caustic soda facility in UAE.

State-owned Gujarat Alkalies & Chemicals Ltd (GACL), the country's largest caustic soda manufacturer, is in talks with a UAE-based business group for setting up a caustic soda manufacturing facility in the UAE.

The Rs 1,200-crore GACL has asked the foreign player to conduct a market survey to assess the demand for caustic-chlorine products in the UAE.

The GACL officials were in Dubai recently to take this further. "The UAE-based entity had approached GACL seeking its co-operation to establish a caustic soda manufacturing plant in the UAE. Currently, a market survey is being carried out on the type of ancillary industries present there and the requirement of caustic and chlorine in the UAE," sources close to the development told Business Standard.

They said the nature of collaboration would be finalised only after the results of the survey were out. The market survey is likely to take around four months. While the name of the group is not known, it is a leading business houses with operations in the UAE. GACL is also said to be open to the idea of joining hands with the foreign player.

GACL managing director Guruprasad Mohapatra believes that there is a good potential for caustic soda and chlor-alkali business in the West Asia. "If things work out, the production capacity of the plant may be in the range of 750 tonnes per day (tpd) to 1,000 tpd," sources said.

Of late, GACL has been making huge investments for its expansion. In January 2008, its board of directors accorded in principle approval to the expansion projects entailing investments of approximately Rs 1,100 crore.

The expansion projects include increasing the caustic soda production capacity of its Dahej plant by around 500 tpd from 735 tpd, enhancing hydrogen peroxide capacity by 75 tpd at its two plants in Vadodara and Dahej, which collectively produce 75 tpd, and setting up a captive power plant of 90 Mw. The projects are expected to be completed in the next two years.