Consolidation in soda ash
Indian firm Tata Chemicals announced an agreement to acquire US-based General Chemical Industrial Products in a $1 billion deal forma US-based private equity company.
Tata Chemicals is part of Indian conglomerate Tata Group, which has holdings in areas a diverse as tea, steel, and automobiles. The Tata Group has been on a steadily growing acquisition drive, buying US and European assets.
While General Chemical is a relatively small player in chemicals, it is a major player in soda ash. Soda ash is a key ingredient in making glass and detergent, among other products. The company makes natural soda ash from soda deposits, which is cheaper to produce than synthetic soda ash. General has over 100 years in reserves in raw material.
Tata Chemicals is also a mjor producer of soda ash (long with salt, agrochemicals, and cement.) In 2005, Tatat bought UK-based Brunner Mnd, a makerof soda ash. The company will be the #2 producer worldwide. #1 is Belgian-based Solvay chemicals, and the former #2 was US-based FMC. Corp.
According to the Financial Times (2/1/08), "The deal will increase Tata Chemicals' market share from 8 per cent to 14 per cent, contributing to consolidation in the industry. Fifty per cent of global production of the material now controlled by three companies."
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