Tata Chemicals (TCL), the 75-years-old company from the Tata Group, plans no expansion for its core soda ash and fertiliser businesses for the next five years.
Instead, it plans to focus on growing the consumer business, now comprising salt and pulses, to bring higher return on capital and prune debt by nearly a third, to Rs 2,500 crore.
TCL is the world’s second largest producer of soda ash, with manufacturing facilities in Asia, Europe, Africa and North America. Its product range includes ingredients to some of the world’s largest makers of glass, detergents and other industrial products.
The demand for soda ash has slowed across the globe, due to the economic slowdown. And, the fertiliser business is suffering due to subsidy payment arrears by governments. This has raised the working capital requirement, bringing down the return on capital. The rising price of gas has further increased cost for the industry, making it unattractive for investment.
“In the next five years, we have planned no further expansion in the existing core businesses. These will be run as cash cows, to help generate the new consumer products,” said P K Ghose chief financial officer, on the sidelines of an event to celebrate 75 years of operations. “We have been in salt and introduced a few new products such as pulses but in the next five to 10 years, we will see an enormous amount of this happening on the consumer front.” Read more..
Instead, it plans to focus on growing the consumer business, now comprising salt and pulses, to bring higher return on capital and prune debt by nearly a third, to Rs 2,500 crore.
TCL is the world’s second largest producer of soda ash, with manufacturing facilities in Asia, Europe, Africa and North America. Its product range includes ingredients to some of the world’s largest makers of glass, detergents and other industrial products.
The demand for soda ash has slowed across the globe, due to the economic slowdown. And, the fertiliser business is suffering due to subsidy payment arrears by governments. This has raised the working capital requirement, bringing down the return on capital. The rising price of gas has further increased cost for the industry, making it unattractive for investment.
“In the next five years, we have planned no further expansion in the existing core businesses. These will be run as cash cows, to help generate the new consumer products,” said P K Ghose chief financial officer, on the sidelines of an event to celebrate 75 years of operations. “We have been in salt and introduced a few new products such as pulses but in the next five to 10 years, we will see an enormous amount of this happening on the consumer front.” Read more..
Source: Automobile Industry News
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