Tata Chem PAT rises 7.45%
Business Standard — January 31, 2008

Buoyant demand for soda ash and operational efficiencies helped the Tata Group promoted Tata Chemicals, the third-largest manufacturer of soda ash and sodium bicarbonate in the world, to post a profit after tax (PAT) of Rs 125.48 crore for the third quarter of 2007-08, 7.45 per cent higher than the Rs 116.77 crore posted in the corresponding quarter of the previous year.

Net income from operations was lower for the quarter by 6.35 per cent, at Rs 1,224 crore, compared with Rs 1,307 crore posted last year, as per the standalone results. Consolidated figures showed a 41.55 per cent dip in PAT at Rs 91.09 crore for the quarter ended December 31, 2007 compared with Rs 155.85 crore in Q3FY07.

Total income has decreased to Rs 1712.67 crore, 4.51 per cent lower from the Rs 1,793.70 crore for the previous quarter. Inorganic chemicals contributed Rs 840 crore for the quarter, 6.19 per cent higher than the previous year.

The fertiliser business contributed less at Rs 860 crore for the quarter, compared to Rs 989.5 crore last year.

"Our chemicals business continues to perform healthily on the back of demand for soda ash. The fertiliser business also continues to do well. During the quarter we have also prepaid our high cost debt and borrowed at much lower levels," said Homi Khusrokhan, managing director, Tata Chemicals.

Tata Chemicals, which has a leadership position in the domestic soda ash segment with a market share of 30 per cent, pins its hopes on the soda ash business in the near future. In India, substantial imports combined with normal production in Gujarat have significantly improved availability of the product.

As against this, the international spot soda ash prices continue to remain firm over $ 300 per tonne and availability is an issue due to the lack of significant capacity additions in the global markets.

Contribution from its acquired subsidiaries, Brunner Mond Group (BMGL), UK and Indo Maroc Phosphore (Imacid) of Morocco were subdued mainly as a result of prepayment penalty on early retirement of high cost debt, higher depreciation and interest costs, inability to pass on higher input and freight costs incurred due to long term contracts and political tension in Kenya after elections in last week of December impacting operations.

Tata Chemicals, the market leader in domestic edible salt market with a 46 per cent share in the national branded segment, is evaluating to introduce new products. During the quarter, the company launched a low sodium salt under the franchise Tata Salt Lite and I-shakti salt in non-metro towns.

Construction work for the first distribution centre for its fresh produce business at Malerkotla, near Ludhiana will be commissioned by April this year and a second centre will come up near Mumbai soon.