Soda ash is a chemical made from the mineral trona or sodium-carbonate-bearing brines, which come from the ashes of plants or can be made through a chemical process. Soda ash is used to make glass, paper, textiles and even food. It is also used in baking soda. Photo courtesy of General Chemical Soda Ash Partners

GREEN RIVER, Wyo. – Tata Chemicals Ltd., a subsidiary of Indian industrial conglomerate Tata Group Ltd., has signed an agreement to purchase General Chemical Soda Ash Partners, the soda ash business of New Jersey-based General Chemical Industrial Products Inc., for $1.05 billion. Tata Chemicals plans to finance the acquisition through a combination of equity and debt.

The two companies finalized the deal Jan. 31, one day after Tata Chemicals reported that its 2007 third-quarter net profit grew by 7 percent to $31.5 million from the same period a year earlier, an increase that the company attributed to “buoyant demand” for soda ash.

Soda ash is the trade name for sodium carbonate, a chemical refined from the mineral trona or sodium-carbonate-bearing brines – both referred to as “natural soda ash.” Soda ash can also be manufactured from the ashes of a number of different types of plants, or be created synthetically from one of several chemical processes. This “synthetic soda ash,” as it is known in the industry, can be made by processing ordinary table salt with chemicals.

Soda ash is a key ingredient needed to make a wide variety of consumer and industrial products, including glass, paper, textiles and foods. It is also the raw material found in sodium bicarbonate, or baking soda, which is found in numerous household products, such as deodorants, toothpaste, and laundry detergent. Soda ash is even used to make fiberglass insulation and computer screens.

Tata’s deal for General Chemical Soda Ash Partners still requires the approval of federal regulators and General Chemical's shareholders – the largest of which is Harbinger Capital Partners, a privately owned firm Birmingham, Ala. that invests in public equities and hedge funds worldwide and specializes in corporate restructurings, liquidations, event-driven situations and turnarounds. When the transaction is complete, Tata Chemicals will have manufacturing facilities on four continents and access to markets in North America, Latin America and the Far East.

“This is a timely acquisition. We're picking up an [American] asset at a time when the Indian rupee is strong [against the dollar],” Homi Khusrokhan, Tata Chemicals managing director, told reporters at a Jan. 31 press conference in Mumbai.

General Chemical Soda Ash Partners is one of the largest producers of natural soda ash in the United States, with a capacity of 2.5 million metric tons annually. The company is headquartered just east of Green River, a small town in southwestern Wyoming, where it owns a large mining and manufacturing operation that provides it access to the largest and most economically recoverable trona ore deposits in the world. The combined General Chemical Soda Ash Partners-Tata Chemicals group will control approximately 14 percent of the world's soda ash production, according to Rohan Gupta, an analyst with Emkay Share & Stock Brokers in Mumbai, making it second only to Solvay S.A., a Brussels, Belgium-based conglomerate that produces approximately 8 million metric tons of soda ash annually.

General Chemical Soda Ash Partners’ Green River Basin facility opened in 1968 and has developed into one of the largest soda ash-production operations in North America. It is located on the prairies of southwestern Wyoming, which are home to some 67 billion tons of trona ore – by far, the world's largest reserves of trona. According to the company, the ore fields cover a 1,000-mile area and extend below ground up to a third of a mile in some places. Situated atop a massive subterranean trona mine, the operation includes a surface refining plant that processes the ore into soda ash around the clock, every day of the year. The mine, which features a network of tunnels that span more than 20 square miles, yields more than 4 million tons of trona annually. The miners use electrically powered equipment, rather than explosives, to extract the ore from the production faces.

General Chemical Industrial Products controls a 75-percent share of the facility and Owens-Illinois Inc. – a Perrysburg, Ohio-based manufacturer of glass and plastic packaging, and one of the world’s largest consumers of soda ash – owns the remaining 25 percent stake in the venture.

Tata Chemicals' purchase of General Chemical Soda Ash Partners is the most recent in a series of aggressive moves around the world by the Tata Group, which acquired British steelmaker Corus Group Ltd. last year for $13.7 billion, as well as a 63.5-percent stake in British chemical company Brunner Mond Group Ltd.  for $127.3 million in late 2005. In a statement issued Jan. 31, Tata Chemicals predicted that the acquisition would “lead to a sizeable increase in its global soda ash capacity and make it one of the largest soda-ash producers worldwide.”  The Mumbai-based company currently operates soda ash plants in Mithapur, a small town in the southern Indian state of Gujarat, and in Haldia, a city of approximately 170,000 in West Bengal, India. The Mithapur facility was built in 1944 and is the largest soda ash operation in India.

According to the United States Geological Survey, the glass industry consumes the lion's share of soda ash produced domestically – about 30 percent – with the chemical-processing sector coming in a distant second, at 15 percent.

Because soda ash is used to make the flat glass in automobile manufacturing and building construction – both of which the federal government considers important economic sectors of the American economy – soda ash production data are incorporated into monthly economic indicators for industrial production by the United States Federal Reserve Board.