With a reduction in glass production during the October-December quarter last year, soda ash producers are witnessing a fall in demand. They're now operating at lower capacities, say industry sources.
Soda ash is a prime requirement in glass making. "Demand from the glass industry has reduced mainly on account of slackness in the real estate and automobile sectors. These are the major glass consuming segments. This caused a fall in demand for soda ash," said a senior official of a leading soda ash manufacturer.
Glass sheet production fell from 9.4 million sq metres in November 2011 to 8.3 million sq metres in November 2012, a drop of 12 per cent. Production in December 2012 was 8.9 million sq metres, as against 10.8 million sq metres in the same month of the previous year.
The country's annual soda ash production capacity is a little over three million tonnes. GHCL, Tata Chemicals, Nirma and DCW are among the major producers.
"Though no new soda ash project has come up in the country in several years, the current players have added huge capacities. With the fall in demand from the glass industry, part of these capacities have remained idle," said an official of the Alkali Manufacturers' Association of India.
Lured, industry sources say, by promising business opportunities in the glass industry, many soda ash producers shifted focus from light soda ash to dense soda ash. The latter is used in glass, while light soda ash is used in detergents. In India, dense soda ash is about a third of the production; the rest is light soda ash. According to industry estimates, glass, picture tubes, bulbs and tubes together constitute 54 per cent of the total demand for soda ash.
A recent report by Capitaline says there is hope. "Recent Budget provisions will promote home ownership and give a fillip to a number of industries, including glass. Growth in the float glass segment is expected to pick up once interest rates start softening, leading to increasing demand for real estate," the report said.
India's glass consumption growth is expected to increase in a number of major sectors such as consumer goods, pharmaceuticals, automotives and construction. "The drop in demand from the glass industry will be partly compensated by demand from the detergent industry," said an industry source.
Prices of soda ash have remained stable since October 2012. Yesterday's quote was Rs 1,165 per 50 kg, marginally up from Rs 1,150 per 50 kg in October.
