The Hindu Business Line : Gujarat Heavy Chem plans tie-up with US co

Sutrapada (Gujarat) April 30 Its expansion with an investment of Rs 300 crore being complete, the Sanjay Dalmia company for chemical and industrial raw materials Gujarat Heavy Chemicals Ltd (GHCL) is now poised to make 1.15 million tonne per annum (MTPA) of soda ash globally and is considering to enter into strategic partnership with a natural soda ash manufacturer in the US.

The company is also considering laying a 14-km railway line from Somnath to Sutrapada once construction on the Veraval-Somnath broad gauge rail line is completed, officials told reporters.

Besides, the export-oriented company would also be able to use the jetty being developed by the Gujarat Government two km from GHCL. Work on this would commence this year.

The company has completed the expansion of an additional 2.5 lakh MTPA capacity at its Sutrapada plant near Veraval in Junagarh district of Gujarat.

The total capacity of the Indian soda ash operations after the present expansion has gone up from six lakh MTPA to 8.5 lakh MTPA.

acquisition

GHCL had acquired S.C. Bega Upsom S.A., a soda ash maker in Romania in December 2005 and turned it around within six months from a $60,000 per month loss-maker to be EBIDTA positive. The Romanian revenue component was $45 million, out of the company's total revenue of $150 million.

In a year's time, the company would be manufacturing to its full capacity, said Mr Tej Malhotra, Senior Executive Director (Operations). The company is also considering the Employees' Stock Option Plan (ESOP).

With this expansion, GHCL hoped to increase its domestic soda ash market to around 30 per cent in India. GHCL is a multi-product progressive organisation mainly operating in soda ash and home textiles categories. In the third quarter of 2006-07, soda ash accounted for 60 per cent of the total business while textiles made up for 26.6 per cent.

In the textile area, GHCL had, through its overseas subsidiary, acquired Dan River, a player in the home textiles market in the US with an annual turnover of $250 million.

It had also acquired over 100 per cent of the shares of the UK's largest home textiles retailer, Rosebys in July 2006, at a cost of $40 million. Rosebys has over 300 retail outlets across the UK and an annual turnover of about $250 million, with an employee strength of 2,000.

The company, which was inaugurated by then President R Venkataraman in March 1988 was a joint venture with the State Government which later divested its equity. It now boasts of a share price in the range of Rs 180 and global standards like OHSAS-18001 (February 2005), ISO 9002-2001 (1996) and ISO-14001, for environmental management for the first time in a soda ash plant in India.

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