The Hindu Business Line : Tata Chem to build up liquidity, conserve cash

“The outlook for the year is good as we are a multi-division company. Our fertiliser business has been growing over the last six months.” – Mr Homi R. Khusrokhan

Mr Homi R. Khusrokhan

Our Bureau

Ahmedabad, Nov. 17 Ruling out any job cuts at this juncture in the wake of the unfolding global economic meltdown, Tata Chemicals Ltd (TCL), the world’s second largest soda ash manufacturer, on Monday said it was taking steps to build up more liquidity and conserve cash even as it goes slow on new plans for mergers, acquisitions and expansion.

But the company’s ongoing plans for modernisation and capacity expansion, involving an investment of nearly Rs 400 crore each, will continue as planned, the TCL Managing Director, Mr Homi R. Khusrokhan, told reporters here. TCL is increasing soda ash production capacity from the current 9,17,000 tonnes per annum (tpa) to 1.5 million tpa and that of urea from 8,64,000 tpa to 1.5 million tpa.

The acquisition of the US-based General Chemicals (Soda Ash) Partners early this year had already increased the company’s global soda ash capacity to 5.5 million tpa.

These modernisation-cum-expansion plans would be completed in about five years.

TCL also manufactures 5 lakh tonnes of salt annually with a market share of 56 per cent. Asked if TCL had any new take over plans, he said it was time for consolidation, caution and going slow.

“But we have not put any full stops.”

Replying to a question, he ruled out any cut in the company’s existing workforce for now. “Time has not come to reduce production capacity either. In India, job cuts are not easy.”

Outlook good

He said the global economic meltdown has not damaged the company’s business so far, as reduced demand in the US has been compensated by demand from the Latin American countries.

“The outlook for the year is good as we are a multi-division company. Our fertiliser business has been growing over the last six months.”

However, he added, it did not mean an all rosy picture. The world is passing through a “difficult period”. The slowdown may continue for the next two-three years.

When asked about soap making, Mr Khusrokhan said although the Tatas had got out of the business long ago, they were looking at options in this regard.

The company is also setting up a small unit at its Babrala (UP) urea complex for promoting use of micronutrients in agriculture which is undergoing transformation.

With the completion of the urea plant debottlenecking, it is expected to be commissioned in the third quarter of the current fiscal.

Similarly, the ethanol plant at Nanded, Maharashtra, is set to be commissioned this month.