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Supply Being the largest player, Tata Chemicals dominates the domestic market. It accounts for more than 40% of the total domestic capacity. While local production was adequate to take care of the entire domestic demand, cheaper imports resulted in piling of soda ash inventory with the domestic players in the last two years. This increase in imports was due to the gradual lowering of the import duty on soda ash in the last few years. Demand-supply Of Soda Ash('000 ton) FY95 FY96 FY97 FY98 Domestic availability 1394 1468 1481 1490 Imports 0 30 51 171 Exports 43 43 47 41 Total supply 1351 1455 1485 1620 Demand 1330 1472 1474 1550 The import duty on soda ash has been brought down from 110% in FY92 to 32% in FY97. This has resulted in large imports of soda ash in the country, as can be seen in the above table. The increase in import duty, in the recent budget, to 40% will deter imports in FY99. Depreciation in the currencies of South East Asian countries further added to the woes of domestic producers. Tata Chemicals, Gujarat Heavy Chemicals, Tuticorin Alkalies are in the process of further expanding their capacities. Nirma is setting up new plant mainly to meet its own requirements. The capacity addition is expected to be around 0.47mn tpa. This will result in a situation of over supply in the next few years. In June 1997, the MRTPC reconfirmed its injunction barring ANSAC (American Natural Soda Ash Corporation) from exporting soda ash to India, thus giving a reprieve to domestic producers. In April 1998, the MRTPC ordered a ban on soda ash imports through Sinochem, a Chinese trading company. However, it may not benefit the domestic producers to a large extent as individual exports (not through ANSAC and Sinochem) from the USA and China may continue. Other sector reports Previous chapter Next chapter

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