GHCL Urges Govt Action as Cheap Chinese Soda Ash Floods India

GHCL Ltd, India's second-largest soda ash manufacturer, is urging the government to impose anti-dumping duties on imports from China and other countries, as a flood of low-cost shipments threatens to crush domestic margins. The company's managing director highlighted the crisis during an interview, pointing to a sharp rise in import volumes that has doubled market share to 25-26% from the usual 15%.

India, representing just 6% of global soda ash demand but growing at a robust 6% annually—far exceeding the worldwide average—lacks access to cheap natural soda ash reserves abundant in nations like China, Turkiye, the US, and Kenya. This puts synthetic producers like GHCL at a structural disadvantage, with natural variants costing nearly half as much to produce.

"We've approached the government for protection against this dumping by global players," GHCL Managing Director R S Jalan told PTI. The plea gains urgency from China's 45% control of global capacity, bolstered by over 10 million tonnes added in Inner Mongolia recently, sparking a worldwide surplus.

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The Directorate General of Trade Remedies (DGTR) is actively investigating petitions from GHCL and other local firms, with an oral hearing now set for later this month. While India extended the minimum import price (MIP) of Rs 20,108 per tonne until December 31—first introduced in 2023—Jalan called it a mere "small benefit," as imports below this threshold persist.

"After the MIP, anti-dumping duty is the next step we're pursuing. It's a scientific process where the government examines margin erosion, benchmark prices, and import values," Jalan explained. He stressed that the quasi-judicial review will determine the necessary safeguards, though he cautioned it's a temporary fix. "Anti-dumping is short-term protection; the real solution is boosting our cost competitiveness without sacrificing margins."

Even amid the turmoil, GHCL maintains 98% capacity utilization, fueled by steady domestic demand. Holding a 26% market share, the firm has mitigated a 19% year-on-year price decline to just 5% margin erosion in Q1 FY26 through aggressive cost efficiencies. Standalone net profit dipped 4% to Rs 145 crore on Rs 823 crore revenue, down 3% due to softer prices.

Jalan underscored India's natural soda ash shortfall as an ongoing hurdle. To counter it, GHCL prioritizes cost optimization and standout service, including a unique 12-hour delivery guarantee that bolsters customer loyalty. "These innovations help us lead the market despite pressures," he said.

The Chinese surplus—around 10 million tonnes over two years—has exporters offloading at rock-bottom prices. "They dump anywhere to offload uneconomically," Jalan noted. Yet, optimism brews from India's solar push: Government targets for 300 GW capacity (from 119 GW) could add 1 million tonnes of soda ash demand over five years via solar glass growth. GHCL is capitalizing with a Rs 6,500-crore greenfield plant in Gujarat, doubling output to 2.2 million tonnes annually.

"Total demand will surge over a million tonnes in five years, and our new 1 million tonne plant positions us perfectly," Jalan said. Exports to Bangladesh and Sri Lanka, plus potential global demand recovery in Europe and China, could further alleviate pressures. A 1% uptick in worldwide growth might divert volumes away from India.

"Soda ash is cyclical, but our 40-year execution record makes us the low-cost leader," Jalan affirmed. With margins squeezed short-term, he eyes solar investments as a game-changer. China's own sector expanded 10-18% in 2023-24 versus global 3-4%, absorbing some excess, with full market integration expected in 1-2 years.

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