Outlook
Indian soda ash
industry has reached a state of maturity. The demand will therefore
increase at the rate at which only user industries will grow.
Detergents, glass and chemical industries together account for more
than 70% of the soda ash consumption in the domestic
market.
In 1998-99, the
demand for soda ash has slowed to 3.5% as a consequence of a
stagnant glass industry and none to impressive growth in the soaps
and detergents sector.
While the demand is
expected to be sluggish, the capacities are expected to increase at
a faster rate. Following are the companies which are expected to
install or expand soda ash capacities by end of FY99,
|
Company
|
tpa
|
|
Birla VXL
Ltd.
|
30,000
|
|
Gujarat Heavy
Chemicals
|
50,000
|
|
Nirma Chemicals
Ltd
|
225,000
|
|
Tata
Chemicals
|
25,000
|
|
Tuticorin
Alkalies
|
42,000
|
This indicates an
additional capacity of 0.472mn ton, thus indicating a growth of
more than 25% over the present capacity of 1.81mn ton. Against this
if demand increases by only 8%, there will be over supply of soda
ash in the market that will adversely affect the performance of the
existing players.
The situation will
further worsen by cheaper imports. Threat of dumping has alleviated
to some extent with the ban on imports from Sinochem and ANSAC,
however individual exports from China and the US, as well as
exports from other South East Asian countries will continue to
flood the domestic market. The overall outlook therefore appears
bleak for the next few years.
