Tata Chem profit doubles to Rs 221 cr The
Economic Times — January 30, 2010

MUMBAI: Tata Chemicals, on Friday, saw its net profit for the December quarter more than double on the back of higher volumes and a stable price environment.

The Tata Group company, which has been leading the conglomerate’s efforts to bring out innovative products for the mass market, said its net profit in the quarter totalled Rs221 crore, compared with Rs 91 crore last year.

However, the company’s sales fell 28% to Rs 2,622 crore during the period.

Tata Chemicals said its net profit for the quarter includes about Rs 12 crore from crop protection firm Rallis India, which became a subsidiary of the company in November.

“During the period, the company witnessed demand growth in domestic as well as in international markets. However, there is a marginal pressure on the margins of some products, such as phosphatic fertilisers, due to a fall in global prices,” managing director RK Mukundan said in a statement.

Tata Chemicals’ research and development division played a major role in the group’s December launch of ‘Tata Swach’, a low-cost water purifier, that could likely initiate a price war in the drinking water segment, currently dominated by consumer goods giants such as Hindustan Unilever and Eureka Forbes.

Tata Chemicals owns 50.06% equity in Rallis. The Mumbai-based company was cautious last year with its expansion plan due to global demand slump.

Mr Mukundan said that since things have started improving, the company could revive its expansion programme. Tata Chemicals, on Friday, said that it will increase manufacturing capacity for the branded salt facility by 50% and also double the capacity at its urea facility, over the next two years.

The group will invest Rs 180 crore to scale up salt production to 8 lakh tonne from 5 lakh tonne, while urea production will be doubled to 2.4 million tonne at an estimated investment of Rs 3,500 crore.

Mr Mukundan said that funds for the expansion have been arranged through internal accruals and that work would commence soon. Expansion at Babrala’s urea facility will start once the company gets the gas linkage, Mr Mukandan added.

Tata Chemicals’ sales of edible salt has risen 20% on a y-o-y basis. “Our domestic edible salt market share has reached an all-time high of 61%,” said Mr Mukundan. The company has three salt brands, including Tata Salt, I Shakti and Tata Salt Lite. Of these, Tata Salt continues to be the number one with a market share of about 44%. Shares of Tata Chemicals rose over 5% to close at Rs 297.60 on BSE.