GHCL, a company having interest in soda ash and textile, will set up a Rs 3,500 crore greenfield manufacturing facility in Gujarat. The Delhi NCR headquartered company is setting up a 0.5 million metric tonne per annum (MTPA) capacity plant across 1,000 acres of land near coastal Mandvi town of Kutch district, said R S Jalan, managing director, GHCL during an interaction with FE. GHCL,
“Already we have acquired more than 850 acres of land and hopefully land acquisition process will be completed in next couple of months. Processes related to environment clearances as well as public hearing have almost completed and the company is likely to get necessary approval by next 6 to 8 months from respective authorities. We are planning to commission the state-of-the-art plant by 2025 end,” said Jalan.
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According to him, long term global soda ash demand will remain firm following huge investments in solar glass. Even in India, big government push for solar energy as well lithium batteries will drive soda ash sector, Jalan claimed, adding that current global soda ash capacity is around 63 million tonne which is predicted to increase up to 80 million tonne by 2030.
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As against the demand of 4.5 million tonne, India is producing hardly 3.7 million tonne of soda ash annually and remaining deficit is being fulfilled through imports, he added.
Mentioning on tightness in global soda ash market he said that over the past two years, no additional production capacity came and at the same time demand has increased. This situation led to a mismatch in demand and supply of soda ash, he said adding that the scenario is likely to continue till next three fiscals.
GHCL Limited is already having one of India’s biggest single location Soda Ash manufacturing facility having installed capacity of 1.1 million tones at Sutrapada village of Gir Somnath district in Gujarat. With addition 0.5 million tones additional capacity through the greenfield project in Kutch district, the company will have aggregate 1.6 million MTPA by the end of 2025, said Jalan.
The company also has lignite mines in Bhavnagar district from where raw material for the production of Soda Ash is being supplied. Soda Ash (Anhydrous Sodium Carbonate) is a major raw material for detergent, glass and ceramic industries.
Talking about the textile business of the company, Jalan said that despite slowdown in yarn market, GHCL is doing good as the company deals in premium segment which is by and large not affected due higher prices. “We have advantage vis-à-vis our competitors as of the total power nearly 75% power is being generated through captive renewable energy sources. Hopefully, overall textile market will improve in the next quarter as inventories are expected to empty and new demand will generate. Peak period for textile is likely to start from April next year. In this backdrop, our strategy for expansion will remain intact. We are adding 20% capacity (Synthetic Yarn) at Madurai plant in Tamil Nadu at an investment of Rs 300 crore in next two months. With this ongoing expansion GHCL’s capacity will enhance from existing 1.85 lakh spindles to 2.25 lakh spindles,” he claimed.
Jalan claimed that by the end of current fiscal GHCL would not only become debt free but cash surplus company. As on 30th September 2022, GHCL’s debt was at around Rs 400 crore. During the first half of current fiscal the company’s PAT remained at Rs 600 crore and in the next six month similar profitability is likely to remain which would help GHCL to give deleverage process additional momentum, he added.
