The production of Soda Ash and Sodium Bicarbonate of Tata Chemicals is recovering after a lull in the first phase of the lockdown as its  customers' own operations come back onstream. 

 

The company’s largest site in Mithapur, Gujarat continued to produce Tata Salt with no disruptions and are operating today at higher than normal volumes in order to supply the market with this essential product. Mithapur operations achieved record monthly production and despatches for Tata Salt in May 2020.

 

Together these three products (Soda Ash, Sodium Bicarbonate and Tata Salt) represent approximately 90% of the revenue from the site.

 

Globally, as of May 2020, the company’s sales volumes of Soda Ash and Sodium Bicarbonate were over 70% of the same period last year, with the UK operation ahead of last year.

 

The UK operation has not suffered any disruption in production or sales with customer demand remaining strong. Export markets served by the US operation have witnessed a slowdown in part due to Covid-19 restrictions in the markets serviced. In Kenya, while there was no disruption in production related to Covid-19, despatches to customers in South East Asian countries were delayed for a period of time on account of complete or partial lockdowns in these regions.

 

In India, the company’s two newer operations in Mambattu, Nellore (Andhra Pradesh) and Cuddalore (Tamil Nadu) were shut down as per the government directives and remained shut, except for essential safety and maintenance work. The sites started limited operation in May 2020 following the relaxation of local restrictions and are currently meeting customer demand in full. Given the scale of their current operations, this would not have a material impact on the results of the company.

 

The company operates within the business to business (B2B) sector with no direct sales to consumers (B2C). Many of our products are classified as essential serving the food, hygiene, pharma and container glass sectors where demand has not suffered significantly due to the pandemic.

 

The company continues to closely monitor national and international sourcing and supply positions to identify any potential material risks. The company has so far not experienced any specific issue in our raw material sourcing. This quarter will see the effects of the national lockdown in India as well as some logistics disruption in South East Asia, the precise value of which cannot be quantified in this very fluid and changing environment.