Tata Chemicals set to expand capacity in 3 years
13 May 2019
Tata Chemicals, part of the USD 110bn Tata Group is planning to invest Rs 2,100 crore in the next three years to expand its salt-making capacity in India by 50% and soda ash capacity in 25%, besides various other bi-products. Besides, the company has decided to spend another £50M to set up a new bicarbonate plant to offset its challenging pension liabilities of £80M.
R. Mukundan, MD and CEO, Tata Chemicals Ltd., said, “In the EU, we have this pension fund issue and it is the main challenge. This is a balance sheet item and we are close to its resolution.”
“We have just put up capital towards building a new bicarbonate plant using carbon capture technology. It’s part-funded by the U.K. government. With that coming on stream, we will be able to address some of the pension fund issues and liabilities, Mr. Mukundan said.
“The agreement reached between the trustee of the Pension Fund Trustees and the company is that both will jointly work towards additional investments, margins, and profits to go through this difficult period.” EBITDA generation would be good enough to support the pension liability, he added.
The company’s pension fund has liabilities of £80M and the U.K. government has agreed to contribute £4M for the £50M plant.