Page 63 - Tata_Chemicals_yearly-reports-2019-20

Integrated report Statutory reportS FInancIal StatementS
Board's Report

1.1.1 Soda Ash 1.1.4 Caustic Soda and Marine Chemicals
In FY 2019-20, the domestic soda ash market remained the caustic soda production and sales were low during
almost flat compared to the previous year’s growth of FY 2019-20 as compared to the previous year. Caustic soda
about 3%. the soda ash market was largely oversupplied market witnessed strong competition and lower prices due
with increased imports and higher availability coming from to oversupply. Bromine production was impacted due to
domestic manufacturers. Higher production through most of extended monsoons and the resultant dilution of bittern, the
the year and lower demand from key consuming industries key raw material used in the manufacturing of bromine. It
led to increase in the pipeline inventories. the production was lower by 13% at 2,120 Mt during FY 2019-20. though
volume of soda ash at Mithapur was marginally lower by 3% this resulted in lower sales at 2,095 Mt, the profitability
and the sales volume declined by 9% over the previous year was maintained due to better market prices and improved
to 6.34 lakh Metric tonne (Mt). during the year, the Company realisation.
increased the availability of the product to customers
through imports from its subsidiaries viz. tata Chemicals 1.1.5 Cement
north america Inc. and tata Chemicals Magadi limited to during FY 2019-20, the sales of cement and clinker were
fulfill the requirements of the domestic market.
marginally lower by 2% at 3.95 lakh Mt, while the production
volumes were lower by 11% at 3.62 lakh Mt, in comparison
1.1.2 Sodium Bicarbonate
with the previous year. Higher acceptability and deeper
Sodium bicarbonate volumes maintained a robust growth of penetration of the newly launched ordinary portland Cement
7% in FY 2019-20 over the previous year. the demand was (‘opC’), with an additional value proposition of high one-
adequately supported with improved availability in domestic day strength along with volume stabilisation of the newly
supplies. overall demand and supplies were balanced launched portland pozzolana Cement (‘ppC’) improved the
during the year. the Company maintained its volumes realisation from the cement business. though the gujarat
and value growth of sodium bicarbonate in line with the cement market saw an overall decline of 9% in demand, the
strategy of continuously increasing value proposition improvement in the prices kept the revenues intact.
through differentiation and focus on bicarb brands that
are customised and targeted towards consuming sectors. 1.2 Overseas Operations
Sodium bicarbonate production and sales registered levels
of 1.13 lakh Mt and 1.09 lakh Mt respectively. 1.2.1 Tata Chemicals North America Inc.
during the year under review, Valley Holdings Inc., a step-
the sales of sodium bicarbonate brands registered a down wholly-owned subsidiary of the Company, has acquired
record 23% volume growth. With the growth in food and the remaining 25% partnership interest in tata Chemicals
feed segments, the Company’s ‘Sodakarb’ and ‘alkakarb’ (Soda ash) partners Holdings from the andover group, Inc.,
brands gained further traction and are well established and a subsidiary of owens-Illinois Inc. for uS$ 195 million. With
‘Medikarb’, the pharma-grade sodium bicarbonate brand has this acquisition, the Company, through its subsidiaries in the
increased its penetration during the year. united States, has increased its ownership in tata Chemicals
(Soda ash) partners, the soda ash producing entity, to 100%.
1.1.3 Salt
during the year under review, the Company entered into a the production volumes at tata Chemicals north america
long term Supply agreement (‘ltSa’) with tCpl for supply of Inc. (‘tCna’) were higher by 3.4% as compared to the previous
vacuum evaporated edible salt as a take or pay arrangement year, mainly on account of improved efficiency in the
for an initial period of 25 years, with an option to extend plant resulting from significant investment in maintenance
further on mutual agreement. the ltSa provides a Minimum projects. there is a short-term oversupply of soda ash
offtake volume, which factors the expected salt business worldwide that has reduced current demand, in addition to
volumes. In case of shortfall in offtake, tCpl shall suitably the impact of the Covid-19 pandemic, which has resulted
compensate the Company and in case of shortfall in supply, in a reduction of production volumes in the latter part of
the Company shall suitably compensate tCpl. tCpl is now the financial year to largely match sales demand. production
one of the Company’s key strategic customers. the Company volumes in FY 2020-21 will again need to be scaled to match
recorded the highest production of salt at 10.78 lakh Mt sales demand which is expected to decline by 5% to 10% in
during the year compared to the previous year high of 10.68 comparison with FY 2019-20, consistent with projected gdp
lakh Mt. regression in the primary markets.

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