Mumbai: On its first anniversary of Corus acquisition, Tatas today acquired a soda ash manufacturing company in the US for a little over US $ 1 billion.

The US-based debt-free and profit-making General Chemical Industrial Products (GCIP), acquired by Tata Chemicals (TCL), had recorded US $ 400 million turnover last year and has around 100 years of extractable trona reserve, TCL's Managing Director Homi R Khusrokhan said here.

Exactly on the same day a year ago, Tatas had acquired Anglo-Dutch steel maker Tata Steel for US $ 12.5 billion positioning itself as the sixth largest steel company in the world. "This particular acquisition (GCIP) is certainly going to change the future of TCL. It is a very good acquisition and will be very good for the company," Khusrokhan said.

TCL intends to fund the acquisition through a mix of debt and equity, but Khusrokhan declined to give the ratio saying things have not been firmed up as yet, but maintained that the deal would be completed in two months from now.

Currently manufacturing around 2.5 million tonnes of natural soda ash, which finds application mainly for glass, chemicals and soaps and detergent making, GCIP has mining and manufacturing facilities at Green River Basin in Wyoming, which has the largest deposit of trona in the world.

This acquisition would enable the Tata Group company to have access to low-cost soda ash sourcing and acquire global customers, among others.

The acquisition will provide TCL access to markets in North America, Latin America and Far East, which compliment its existing business. TCL currently generates 40 per cent of its revenue from overseas.

TCL, which acquired GCIP from Harbinger Capital Partners and has three million tonne soda ash manufacturing capacity at present, is tipped to be the second largest soda ash manufacturer in the world.

TCL had acquired UK-based Brunner Mond, another soda ash manufacturer, in 2005 for about 200 million.

Asked whether the timing of the acquisition was perfect at a period when the prospect of recession is staring at the US economy at its face and the margin from the domestic market is higher, Khusrokhan said since GCIP is a natural soda ash manufacturer, it would find enough demand from the market as awareness on global warming is picking up.

"In addition to this, natural soda ash is the most sustainable business," he said. "Again, whenever Tatas goes into a new business, they take a long-term view. Our approach to merger and acquisition is different from others. We build businesses," he said adding there could be more such acquisitions in future as well.

Khusrokhan said the domestic industry is doing very well and there is a very high utilisation in the country. It is buoyant and margins here are healthier.

Source : PTI