Tata Chemicals, a Tata group company, has bid for the assets of the Sudarshan Kumar Birla group firm Saurashtra Chemicals.
Sources in the Birla and Tata groups confirmed that the Tatas have made a bid. The list of other bidders includes Nirma and DCW Ltd.
According to sources close to the development, Tata Chemicals has emerged as the highest bidder. However, this could not be confirmed. A Tata group executive said: "We do not know whether we have emerged as the highest bidder. We have yet to get a communication from Asset Reconstruction Company of India Ltd."
Saurashtra Chemicals, a Porbander-based soda ash manufacturer, is under the purview of Arcil which has put the company's assets on the block.
Vivek Jain, managing director of DCW, a diversified manufacturer of basic chemicals, also confirmed his company's participation in the bid. "There are synergies between both the companies and we have conducted a due-diligence of Saurashtra Chemicals," he said.
Tata Chemicals, the largest soda ash producer in the world, has its facility located at Mithapur. Soda ash is the key raw material for the detergent and glass sector. The company also manufacturers caustic soda and refined sodium bi-carbonate.
According to CMIE data, Saurashtra Chemicals incurred a loss of Rs 22.41 crore (Rs 224.1 million) on sales of Rs 273.51 crore (Rs 2.735 billion) in the financial year ended 2003.
The paid-up capital stood at Rs 32.65 crore (Rs 326.5 million), while borrowings stood at Rs 244 crore (Rs 2.44 billion).
Tata Chemicals saw its soda ash sales volumes in FY2004 improving by 3 per cent over volumes sold in FY2003, enabling the company to sustain its market leadership with a share of 33.3 per cent.The company's total soda ash exports in FY2004 amounted to 128,000 MT, a 26 per cent increase over the previous financial year. The company is now the largest exporter of soda ash from the country.