Tata Chemicals (TCL) has reorganised its businesses under four key verticals - Agri Sciences, Nutritional Sciences, Material Sciences and Energy Sciences - as part of its strategy to build a science and chemistry focussed organisation. The sale of its consumer business, which includes branded salt, spices and pulses business, to Tata Consumer Products (formerly Tata Global Beverages) for around Rs 6,000 crore has led to the reprioritisation of its business under four verticals.
The company's strategy going forward will be to build scale and value in these four businesses, said R Mukundan, Managing Director and CEO of Tata Chemicals, in the annual report for 2019-20. Soda ash, marine chemicals, silica and nano products will be the businesses in materials sciences vertical. The nutritional sciences vertical will focus on production of food and pharma grade salt and bicarb, ingredients and formulations, prebiotics, probiotics and natural extracts. Crop care and the seeds business of Rallis comprises the agri-sciences vertical. The energy sciences will have battery recycling, actives and battery storage.
In the last financial year, TCL acquired the remaining 25 per cent stake in Tata Chemicals (Soda Ash) Partners in North America for $195 million to make it a fully-owned subsidiary. TCL has soda ash manufacturing units in India, the UK and the US. With an annual capacity of around 4.3 million tonnes, the company is world's third largest soda ash producer. More than two-thirds of this capacity is natural soda ash based and these are located at the Green River Basin in the US and at Lake Magadi in Kenya. Synthetic soda ash and sodium bicarbonate are manufactured at Mithapur, Gujarat and Northwich in the UK.
The expansion and investments in food and pharma grade bicarb is progressing on schedule in the UK and India, said Mukundan. The prebiotics manufacturing plant at Andhra Pradesh began its commercial production early this year. "Our focus is on new product launches and scheduled capex completion," Mukundan said. Rallis completed the merger of Metahelix, thereby having a complete portfolio of products including seeds and crop care in its portfolio, he said. "We moderated our investments in EV battery in tune with the pace of transition to electric in the auto sector, even as we began operations of battery recycling unit," he added.
TCL's consolidated revenue from operations was flat at Rs 10,357 crore in the last financial year. The EBITDA increased by 9 per cent to Rs 1,949 crore, while net profit fell to Rs 1,032 crore from Rs 1,387 crore. The business generated cash flows at Rs 1,780 crore and it supported the capital expenditure of Rs 1,199 crore during the year. The total cash and current investment was Rs 3,681 crore as on March 31, 2020.
The current pandemic has brought the importance of digital thrust and sustainability focus, said Mukundan. "Going forward, we expect immediate market conditions to be challenging," he said.