GHCL – An Overview
Established in 1983, GHCL is a well-diversified company with a market capitalization of about
Rs 4,800 crore [As on February 1, 2023/ BSE India]. The company has two key business
verticals: Inorganic Chemicals and Textiles.
Being the second largest manufacturer of anhydrous sodium carbonate (Soda Ash) in India
with a nearly four-decade-long presence here, GHCL fulfils about 25% of the country’s total
annual demand for Soda Ash, through its plant at Sutrapada in Gujarat. The plant has an
installed capacity of 1.2 million tonne per annum (MTPA) of soda ash. Besides, it also has a
backward integration of limestone, lignite mines and salt works with a vast presence in both
Gujarat and Tamil Nadu.
Over the past two decades, the company forayed into the spinning business, which has
expanded to 2.25 lakh spindles. The firm also has 47MW of renewable energy capacities,
including wind and solar which caters to ~75% of its energy requirements at the spinning
business.
In a span of 12 years from 2010 to 2022, GHCL’s revenues grew 3.5x to over ₹ 4,000 crore,
while its profits before tax (PBT) has grown by 7x to over ₹ 800 crore, during the same
period. At the same time, the company’s debts have reduced by ₹ 1,400 crore and now it is a
net-debt free Company with surplus cash.
Soda Ash – a global perspective and India story
Soda Ash is the 10th most consumed material globally and till date has a wide range of
applications in manufacturing of detergents, glass, silicates and chemicals among others.
Globally, the installed capacity for manufacturing Soda Ash stands at 71 MTPA, using which
63 MTPA is produced, with China being the largest producer accounting for around 45% of
the total global production volume. The US and Europe combined account for 40% of the
global capacity.
The demand for Soda Ash has grown at 2-3% every year across the world. Against this, the
demand in India has grown by 5% every year. In the fiscal year 2021-22, the soda ash
demand in India stood at 4.1 MTPA, of which roughly 70% comes from detergent and glass
industries. However, ~20% of India’s soda ash demand is met from imports, underlining the
need for enhanced domestic capacities on the lines of Atmanirbhar Bharat.
India which represents merely 6% of the total soda ash manufacturing global capacity, also
has a magnified focus on green energy transition. This will amplify the requirement for soda
ash – a key raw material in manufacturing solar glass. At the same time, the push for
increasing adoption of electric vehicles will also drive the demand for Soda Ash – which is
used to process lithium ore for producing lithium carbonate. Additionally, soda ash derivate
product sodium bicarbonate is used in treatment of industrial flue gas treatment (FGT), which
has the potential to grow in future with increasing adoption and growing environmental
concerns.
Taking India’s green energy targets into account, India alone will see soda ash demand to
grow to 6.0 MTPA by 2030. Here, it is important to look at the demand-supply scenario. At
this pace, India is expected to remain a net importer of soda ash, unless fresh capacities are
announced, which are inevitable to support the country’s growth agenda.
Between 2023 and 2030, India only has one major capacity enhancement announced. With
demand expected to increase furthermore, this makes the country even more dependent
upon imports from other countries such as China and Turkey.
