Page 99 - Tata_Chemicals_yearly-reports-2020-2021

Integrated Report Statutory Reports Financial Statements
1-59 Management Discussion and Analysis 147-300

Buoyant Indian rural demand, improving urban demand sodium bicarbonate and salt will continue as part of the
and ongoing vaccination programmes are the key overall strategy to focus on the higher value application
positives which will play in the medium term. Although sectors.
the GDP has registered growth in the third and the fourth For TCML, Kenya, demand recovery in export markets and
quarter of FY 2020-21, uncertainty related to the near-term a consequent revival in pricing together with a focus on
outlook has risen since April 2021, following the spate of the domestic East African market to maximise overall price
new Covid-19 infections which have necessitated localised realisation through strategic market mix would be an area of
restrictions.
focus. In addition, ensuring plant reliability and driving down
In India, recovery in soda ash demand across application costs would continue to be key result areas.
sectors and an anticipated reduction in imports are likely to For the crop protection sector, India is projected to be a
bring demand and supply into balance with corresponding key beneficiary of the global move towards ‘China plus
easing of pressure on pricing. Increasing energy costs and one’ sourcing strategy of companies, which is expected to
freight costs need to be monitored as possible drags on provide further momentum. Industry is collaborating with
performance, however, ongoing programmes on driving the Government in building an enabling ecosystem to make
cost reductions and efficiencies are likely to yield benefits in India an agrochemical powerhouse. As part of its strategy,
margins. ‘Repositioning Rallis for Leadership’, Rallis is focussing
Continuing push on growing value-added sodium on investment in research and development, flexible
bicarbonate sales into the growing food, feed and pharma manufacturing capacities, digital initiatives to enhance
sectors in line with the Company's transformation strategy internal efficiencies and further leveraging its branding
and offering customers in these sectors a portfolio of power. These initiatives will help in attracting partnerships
products including its NQ range of prebiotics will be a focus across the value chain, including contract manufacturing.
area. This would also further ramp up capacity utilisation of 6. Risk and Opportunities
the new prebiotics plant. Similarly, ongoing project to
increase salt capacity in order to service long term growth The key short to medium term risk for the Company would
in demand from the key customer, TCPL will continue. be a slow post-pandemic price recovery in key export
Sustainability driven trends in the rubber and tyre industry markets serviced by the USA and Kenya. The Company, across
calling for incorporation of specialty grades of silica augers units, plans aggressive cost control and cash conservation
well for the growth of the specialty silica business in terms of measures through prudent capital expenditure spends and
customer acquisition and capacity growth. disciplined working capital management to counter this
phase. In addition, the focus on more resilient products and
The outlook for TCNA, USA remains positive with soda ash markets would moderate this impact.
operating rates moving up close to normal levels driven
primarily by ongoing recovery in export markets. Pricing In India, with increasing demand, defending the Company’s
is likely to lag demand recovery but with positive trends market position is a prime focus area. The Company will
emerging, that would be leveraged as contracts permit. pursue the execution of its capacity addition plans at
At TCNA, continuous improvement, cost reduction and Mithapur for key products i.e. salt, soda ash and sodium
sustainability in operations will remain areas of focus to drive bicarbonate under ‘Project Pragati’.
margin improvement. The Company’s value-driven growth opportunity in the
sodium bicarbonate space with brands in food, animal
In the UK, soda ash demand, which was not significantly feed, pharma and specialty segments will ensure scale and
impacted during the pandemic, continues to remain consolidation. Strategic partnerships around themes of
firm. However, pricing which is primarily contractual has innovation and sustainability will continue to offer better
come under pressure from January 2021 and will persist at customer value.
these levels till at least the year end. Sodium bicarbonate
demand would continue to remain strong and with the Leveraging technology with an increased focus on
commissioning of Carbon Capture and Usage (CCU) plant, automation and digitisation using Industrial Internet of
as part of the Company's overall sustainability push towards Things (IIoT), digital twins, data analytics and satellite imaging
net zero, the Company expects to see benefits flowing will help the Company make its processes more robust for
through. The salt business which was affected by the closure customers and internal efficiencies. Multiple projects around
of the hospitality and leisure sector is likely to see normalcy plant and supply chain automation, customer engagement
return as the UK begins to ease lockdown restrictions. Both and digital imaging are being implemented.

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