Tata Chemicals has earmarked a capex of Rs 8,000 crore over the three years as the world’s third-largest soda ash maker embarks on an expansion spree that includes scaling businesses sustainably. “We intend to invest about Rs 8,000 crore over the next 2-3 years as capex,” chairman N Chandrasekaran said at the company’s AGM held virtually on Monday.
Addressing shareholders, Chandrasekaran said the company will increase its soda ash capacity by another 1 million tonne (MT), taking its total global capacity to 5.3 MT. The company’s 380 kilo tonne of salt capacity addition in the UK and Mithapur in India would increase its global capacity to 2.3 MT and that in India to 1.8 MT.
The company is also expanding its specialty silica capacities by 5 times, in a phased manner, to reach 50,000 KT to support the emerging demand from tyre industry, he said, adding the firm would add 200 KT of capacity addition at its sodium bi-carbonate plant at Mithapur. He, however, did not provide the timelines earmarked for these expansion projects.
Last year, Tata Chemicals had earmarked a Rs 5,000-crore capex spend over the “next few years”, while that for FY23 was Rs 1,500 crore.
To achieve market leadership in its core business, de-leverage international operations and accelerate commitment to sustainability aligned to the project Aalingana, remains thefocus, he said. “The company has committed to science-based target initiatives, with a goal of becoming carbon neutral by 2045,” he added.
Talking about the general industry, Chandrasekaran said the Indian chemical industry was expected to see moderation in demand growth in 2023 on the back of a “strong” post-Covid recovery seen in 2022. In line with the continued GDP growth, the long-term outlook remains positive.
The global chemical growth moderated in 2023 mainly led by the slowdown in China and supply chain bottlenecks. It is expected to grow by about 3% in the given macro environment.
The outlook for the Indian economy also remains positive, he said, adding the estimated GDP growth in India expected to be about 6.1% in 2023-34 and will remain one of the fastest growing economies. The global economic outlook for 2023 appears to have downside risks and the global GDP growth is expected to be about 2.9%, he added.