Tata Chemicals to Hive off US Soda ash Business

Tata Chemicals to Hive off US Soda ash Business

by 5paisa Research Team Last Updated: Dec 11, 2022 - 12:04 am 49.4k Views
Listen icon

Tata Chemicals, one of the largest soda ash manufacturers in the world, is planning to hive off its US soda ash unit. While the likely valuations are not yet confirmed, the markets are estimating a valuation of around $1 billion expected by Tata Chemicals. That would be roughly 30% of the current market cap of Tata Chemicals, which stands at $3.50 billion.

Tata Chemicals is open to going with PE funds or with strategic partners to sell the stake. In the last few months, there have been a number of big deals in the global soda ash market with big names including Solvay of Belgium looking to hive off soda ash business. However, Tata Chemicals has refused to confirm as to whether it is even considering the sale.

Soda Ash is derived from the mineral called Trona. Trona is a sodium carbonate compound that is processed into soda ash or into bicarbonate of soda. The state of Wyoming in the United States has the largest reserves of Trona in the world and it is estimated to have Trona reserves to the tune of nearly 127 billion tonnes.

Tata Chemicals is among the largest producers of soda ash in the world with a capacity of 5.5 million tonnes per annum (MTPA). Tata Chemicals relies heavily for its supplies of Trona on the Wyoming mines in the United States and the Lake Magadi mines based in the African nation of Kenya.

One of the reasons Tata Chemicals is looking to sell the US soda ash unit is the sharp fall in demand in the US. North American output fell 18% in the last 12 months for Tata Chemicals and that was mainly driven by demand compression in the aftermath of the COVID 19 pandemic. Its US sales fell from $479 million to $388 million.

Soda ash finds extensive use in detergents, pharmaceuticals, glass, paper and also in water treatment. Tata Chemicals has been gradually restructuring its product lines. Two years back, it hived off its salt manufacturing unit to Tata Consumer Products since it was more of an FMCG product. Tata Chemicals may focus more on the high growth Indian markets.

Also Read:- Sector Update: Chemicals

How do you rate this blog?


Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage


About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Weekly Outlook on Copper - 01 December 2023

Copper prices saw a modest 0.33% gain, reaching 722 on Thursday, as worries about a slowdown in Chinese manufacturing loomed large. The November's NBS Manufacturing PMI slipped to 49.4, the second consecutive monthly decline, heightened concerns, emphasizing the need for additional government support to fortify China's economic growth. The NBS Non-Manufacturing PMI at 50.2, reflecting the 11th month of service sector expansion, hinted at a softer pace.

Swing Trading Stocks: Week of 04 December 2023

Swing Trading Stocks for the Week

Weekly Market Outlook for 04 December to 08 December

Our markets started the truncated week on a positive note and it rallied higher throughout the week. The first day of the December month infact witnessed a new record as the Nifty surpassed its previous high and ended in uncharted territory above 20250 with weekly gains of almost two and a half percent.