7 years on, Europe plant still a trouble for Tata Chemicals

Dec 12 2013, 13:31 IST
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SummaryIn seven years, Tata Chemicals has gone through two phases of restructuring...

In seven years, Tata Chemicals has gone through two phases of restructuring, complete re-branding, fund infusions and acquisition. But Brunner Mond — a company acquired by Tata Chemicals in 2005 and now part of the Tata Chemicals Ltd Europe (TCE) — refuses to come out of its troubles.

On Monday evening, Tata Chemicals confirmed that the company will again restructure its business in the United Kingdom and close the Winnington soda ash and calcium chloride plants, which will lead to a loss of 220 jobs.

“There is real regret that TCE will have to bring to an end a long history of soda ash production at the Winnington site, but energy costs have overwhelmed the viability of these plants,” TCE managing director Martin Ashcroft said in a company statement on Monday.

Brunner Mond was hived off from the now legendary industry behemoth Imperial Chemical Industries (ICI) in 1991 along with two other companies and floated into different sectors.

While the other two companies spawned from ICI — once a corporate titan which brought the entire city of London to halt on the eve of its results — continued their legacy in the form of pharma major AstraZeneca and Imperial Metals Industry (IMI), Brunner Mond gave sleepless nights to Tata Chemicals’ management.

Prasad Menon, the then MD of Tata Chemicals, had said the first step would be to restructure the company’s debt, which was around R390 crore at the time of acquisition. The company was brought for R508 crore.

That was, in fact, the first round of restructuring that was done to bring the servicing cost down and make the operations more profitable. At what rate was that done and how much was restructured could not be known as mail sent to Tata Chemicals on Tuesday remained unanswered.

This measure did not suffice much, although the acquisition had made Tata Chemicals the third-biggest soda ash manufacturer in the world with a capacity of 3 million tonne per annum.

Thereafter, in mid-2006, the company launched a programme ‘project fusion’ an approach to set up cross-functional teams to explore the potential synergies between the companies. While it continued for some time with some positive results, finally in August 2009, Brunner Mond had to down the shutters at its site in Delfzijl, Netherlands, as part of another round of restructuring. This also reduced the number of its employees from 1,529 in 2009 to 1,401 in 2010-11. Today

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