GHCL Ltd has acquired a majority stake in S C Bega Upsom SA, a leading soda ash manufacturer in Romania in an all cash deal through its international subsidiary.

The company has acquired a controlling stake of 65 per cent in the Romanian firm at $19.50 million with a requirement to make a public offer to purchase the balance35 per cent by the local Romanlan regulations. The company says that it has made the acquisition at a highly competitive cost. A similar capacity acquisition in India would have come at double the price of this acquisition.

With this acquisition, GHCL's global soda ash manufacturing capacity will increase by 300,000mtpa to 900,000mtpa. The acquisition has been financed through the recent FCCB issue of $80.5 million.

According to Sanjay Dalmia, chairman, GHCL, "This acquisition is a first step towards attaining leading position in the global soda ash industry with a strong presence in the European markets. Romanian acquisition would provide us with the comprehensive knowledge of the European markets keenly required for a robust growth strategy of ours."

Dalmia also said that GHCL would leverage and replicate its Indian experience to make this plant as the lowest cost producer of soda ash given its strategic location to tap east and Central European Markets which have substantial high level of reserves of Natural resources required to produce Soda Ash.

In addition to acquiring this plant, GHCL and its subsidiary has also entered into an MoU to acquire majority stake in the only other soda ash plant in Romania. Upon completion, its capacity in Romania will go up to 700,000mtpa and its global capacity increase will be 1,300,000mtpa.

The two plants are ideally located to tap East and Central-east European Markets and have a high level of reserves of natural resources required to produce Soda Ash.

GHCL is already expanding its soda ash manufacturing capacity from 600,000mtpa to 1,100,000mtpa at its plant at Gujarat, achieving leadership in the domestic soda ash market, with 200,000mtpa capacity to be added immediately, followed by the remaining 300,000mtpa thereafter.

On completion of the expansions, the company's global capacity will go up to 1,800,000mtpa.

GHCL is India's lowest cost soda ash producer with control over all its captive raw materials like salt, limestone, coke briquetting and lignite. It has managed its costs by innovating use of coke briquettes made from coke fines rather than using the expensive metallurgical coke in its kilns. It is the first soda ash company to obtain private mining rights for lignite thereby substantially reducing its fuel cost.