GHCL Targets 2.3-Million-Tonne Soda Ash Capacity By 2030
The company is confident of maintaining Ebitda margins in the 25-30% range over the next two years.
GHCL is aiming to almost double its soda ash manufacturing capacity from 1.2 million tonnes per annum currently to 2.3 million tonnes per annum by 2030, according to the company’s Managing Director (MD), RS Jalan.
“In the next five years, our vision for 2030, we are setting up a new greenfield project where we have a vision of doubling the capacity. We have right now 1.2 million tonnes, it will go to 2.3 million tonnes,” he said during a conversation with NDTV Profit on Tuesday.
The company will see capacity addition from the greenfield project after three years, according to Jalan.
“The new greenfield project will be coming in the only after three years. That's number one. Therefore, the margin expansion on that soda ash business will be after three years,” the top executive underscored.
The leading soda-ash producer is confident of maintaining Ebitda margins in the 25-30% range over the next two years.
“Our Ebitda margin is in the range of around 25% to 30% kind of a margin rate. If you look at maybe two years down the line, probably you will see that kind of a margin will continue to be there,” he said.
The firm is charting an ambitious growth path despite short-term headwinds from global market dynamics, particularly influenced by China.
“China has around 45% of the global capacity. Against 80 million tonnes of the total global capacity, they have around 38 to 39 million tonnes of the capacity. And obviously, China has some major role to play in the global scenario,” Jalan explained.
“In the short term, definitely we see a kind of an implication of China's scenario on the overall global soda ash business and that will definitely have an impact on the Indian industry as well,” he said.
GHCL has earmarked Rs 300 crore per year for capital expenditure over the next two years, primarily for the bromine and vacuum salt businesses and operational efficiency improvements. Jalan projected a return ratio of over 30% for these new ventures and an overall return ratio of 20-22% for the company.
Shares of GHCL closed 1% lower at Rs 543.05 apiece on the NSE, while the benchmark Nifty50 ended 0.39% higher at 24,868.6.
