Caustic soda: GACL to expand installed capacity to 900,000 MTPA by 2022

Ahead of the expansion of the caustic soda market globally, Vadodara-based Gujarat Alkalies and Chemicals (GACL) is going to increase its current installed capacity of about 520,000 metric tonnes per annum (MTPA) to about 900,000 MTPA by the end of 2022 through the expansion of the existing unit and a greenfield project.

The listed company, owned by the Government of Gujarat, is adding 190,800 MTPA capacity to its existing 282,600 MTPA caustic soda plant located in Dahej, South Gujarat, through a 5,500 million expansion project. “We expect to commission the Dahej plant expansion project by October this year,” said Harshad Patel, GACL’s managing director. The company also owns a 225,000 MTPA plant in Vadodara.

Besides the expansion of the caustic soda plant in Dahej, GACL is building a green field caustic soda plant with a capacity of 290,000 MTPA and a 130 MW captive power plant in a joint venture (JV) with the National Aluminum Company (NALCO) near GACL’s existing Dahej plant. Control of the GACL-NALCO Alkalies & Chemicals (GNAL) JV will remain solely with GACL.

For the 20,000 million rupee project, GACL and NALCO contributed in a 60:40 ratio from their respective internal funds. The remaining amounts were raised from various donors. GNAL is expected to be fully operational by December this year, GACL’s CEO said.

Currently, GACL has a share of about 11 per cent of the total caustic soda production in India, Patel said, adding that with the additional capacity, the company expects to reach a share of almost 20 per cent in caustic soda production by the end of the current financial year.

Demand for caustic soda is high in both domestic and export markets. According to industry sources, increased demand from the textile and alumina sectors, due to growing investments in these sectors, is expected to drive the overall demand for caustic soda in India. According to data from the Alkali Manufacturers Association of India (AMAI), the installed capacity of caustic soda in India is 476,3000 tonnes per annum at the end of FY21. During the year, capacity utilisation was over 75 per cent. However, GACL’s capacity utilisation was almost 100%.

Besides GACL, Shriram Alkali & Chemicals, Grasim Industries, Nirma, Aditya Birla Group, DCM Shriram, Nirma and Reliance Industries are the major players in caustic soda production in India.

Caustic soda is an inorganic, strongly alkaline and odourless chemical substance that has applications in various industries, such as pulp and paper production, viscose yarn, staple fibre, aluminium, textiles, soaps and detergents, dyes, drugs and pharmaceuticals, petroleum refining and water treatment.