Tata Chemicals Magadi scales up operations

October 27, 2011
Shares

, NAIROBI, Kenya, Oct 27 – Local soda ash producer Tata Chemicals Magadi (TCM) has embarked on ambitious plans to scale up operations at the lake Magadi plant that has been in existence for over 100 years.

After investing Sh10 billion ($100 million) on a new plant meant to produce premium grade soda, TCM Managing Director Michael Odera said the company is on a growth path with plans to open up to other markets.

“As the economies of Africa grow, we would hope to grow with them. Our strategy is to focus on areas of high potential growth around South Africa, Nigeria and Egypt,” he said during a press briefing at the TCM headquarters in Magadi on Tuesday.

The growth, however comes on the back of a rough couple of years for the company due to expansion costs and a slight dwindle in the demand for soda ash in major markets, since the global economic downturn.

The company that sits on approximately 227,000 acres of land, posted Sh10 billion ($100 million) in total turnover for the previous year, producing more than 600,000 tonnes of soda ash.

Poor infrastructure further frustrated business, which in recent years caused the company to construct its own railway system stretching 146 kilometres (km) from Lake Magadi to Konza, linking with the Mombasa railway.

The rail also offers transport to Magadi township’s 5,000 residents, who are heavily reliant on the TCM for essentials such as water.

About 1.2 million litres of water is pumped into the township on a daily basis used both for the company operations and community activities.

The water supply, however, has put a strain on the company, most recently with environmental factors posing a major threat to the company’s source in Nkuruman Escarpment 35km away.

“We are operating at about 80 or 90 percent of our comfortable requirement because we are noticing a drop at our main source. There is deforestation taking place towards Narok so beyond the catchment area there is a drop in water levels,” he revealed.

TCM provides nine watering points at various locations along the 35km pipeline from Nkuruman escarpment to Magadi as well as piped water to the Ilparakuo community located about 12 km from Magadi Township.

Lake Magadi’s soda ash deposits that have been around for centuries before being officially mined in 1911 run 40 meters deep.

With only eight to 10 meters actually mined, the salt deposits regenerate at a rate of 680,000 tonnes a year, primarily fed 200 by hot and warm water springs.

Over 95 percent of the company product is exported to its principal markets of South East Asia, Indian sub-continent, Africa and the Middle East through the Mombasa Port.

TCM’s primary product is soda ash accounting for 91 percent of its sales portfolio followed by crushed refined soda contributing five percent and salt with four percent.

“In Kenya we are known for Magadi salt. The infrastructure we have has a capability to make 60,000 tonnes of salt. Our focus is for animal and industrial uses for the last 10 to 15 years,” he said.

Previously operating as Magadi Soda Company, a subsidiary of the Brunner Mond Group, the firm adopted the trading name Tata Chemicals Magadi Ltd last April as part of a global rebranding process.

Shares

Latest Articles

Stock Market

Most Viewed