Tata Chemicals Ltd, one of the leading names in global specialty chemicals industry has apparently penned down a business transfer agreement with the Tamil Nadu based Allied Silica Ltd. If reports are to be relied on, under the deal worth INR 123 Cr., Tata Chemicals would be procuring ASL’s expanding precipitated silica-based business including the plant on a slump sale basis.
The acquisition is a part of INR 295 crore investment approved by Tata Chemicals in February last year, to gain entry in the HDS (Highly Disposable Silica) business. As per experts’ opinion, the deal which is expected to terminate within next three months, is deemed to be Tata Chemicals’ strategic move to penetrate technologically equipped differentiated businesses that hold better customer centricity. In line with its focus to strengthen its position in specialty chemicals industry, the company may have also taken the decision of adding value to its soda ash business, cite sources.
Tata Chemicals’ soda ash business, as claimed by analysts’, would observe a steady growth over the next two years, on account of the stable demand supply curve. While the business has experienced an upswing on the grounds of China’s reduced production capacity, the launch of new capacities in Turkey may result in temporary pressure.
It has been speculated that the demand for soda ash in specialty chemicals industry would experience a linear curve over a long term. In this regard, sources categorically stated that the company has raised the price of soda ash by almost 2% w.e.f. from the beginning of this year.
Allegedly, the management has also identified some of the other lucrative areas such as consumer products, specialty chemicals, and inorganic chemicals. Tata Chemicals is also planning to make a continuous investment of nearly INR 25 Cr -30 Cr annually toward brand building. For the record, the company’s stock price was closed at Rs 723.6 on April 6th, 2018.