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Soda ash makers struggle to compete with imports

Source : BUSINESS_STANDARD
Last Updated: Thu, Apr 04, 2013 20:43 hrs

Demand in the country in 2012-13 showed healthy growth of 10-11 per cent, led by healthy growth from the detergents and chemicals segments (that from the flat glass and bottle glass industries witnessed below-par growth). However, a large part of the demand was met by rising imports, up 15-20 per cent to around 650,000 tonnes.

Prices of soda in India have been largely stable since October 2012, when these were Rs 1,150 for 50 kg. In March, it was around Rs 1,165 for 50 kg. The cost of shipments is an issue. A little over 80 per cent of the country's soda ash making capacities are in Gujarat. "For every tonne transported from Gujarat to the southern and eastern markets, the logistic costs are $75-80 a tonne. Whereas for the Chinese and European manufacturers, the logistic costs are only $35-40 a tonne to these ports," said a senior official in Gujarat Heavy Chemicals Ltd. "Despite this, we're producing to capacity."



Recognising the problem, the government has imposed anti-dumping duties on some exporting countries. A final notification on Russia and Turkey is pending.

"Costs have gone up by five to 10 per cent, while the companies have been unable to pass these onto consumers," said an industry source, adding the impact on margins will be high this year.

"Factors such as high cost of power and infrastructure challenges have resulted in high cost of production. We are not averse to regular imports but cheap imports in the form of dumping are adversely affecting the industry," said an official of the Alkali Manufacturers' Associ-ation of India.

Production in the country was 218,000 tonnes in January 2013, up from 198,000 tonnes in October 2012.

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