Tata to buy General Chemical Industrial Products for $1B

Deal will give Tata 14% of global soda ash market

By Dave Hannon -- Purchasing, 1/31/2008 11:32:00 AM

Indian chemical firm Tata Chemicals has agreed to buy General Chemical Industrial Products for $1.01 billion.

East Hanover, N.J.-based General Chemical Industrial Products is the world’s second largest producer of soda ash, or sodium carbonate, with a capacity of 2.76 million tons a year, while Tata currently has a capacity of 3.2 million tons of soda ash a year. Most of that capacity was gained when Tata acquired Brunner Mond Group Limited in December 2005, according to a company statement.

The combined group will control about 14% of the world soda ash capacity, said Rohan Gupta, an India-based analyst with Emkay Share & Stock Brokers in a Bloomberg report, making it second only to Belgium’s Solvay, which has capacity of near 8 million tons.

Soda ash prices in the U.S. have increased in the last few months, jumping from $131/ton in September to $160/ton in January, according to Purchasingdata.com.

Tata Chemical is part of India’s largest conglomerate, Tata Group, which has been on an aggressive spending spree in recent years. Tata firms bought British steelmaker Corus last year and has been named front-runner to buy the Jaguar and Land Rover unit from Ford.