Soda ash is highly capital intensive business and it takes almost 4-5 years to get commercial production from any greenfield project that’s why it always remains a oligopolistic business with 3 main players in india (GHCL,TATA CHEMICALS & UNLISTED NIRMA). Due to the above fact , it acts a barrier to entry for any new emergent to gain any meaningful market share. The renewable energy especially solar power needs glass on very large scale and soda ash is major raw material in glass production. I consider it as a proxy to Green energy.
Meaningful consumption of soda ash in lithium ion battery will further act a growth driver when the complete ecosystem of EV’s kicks in.
In the end Soda ash is commodity cyclical business and if you know the exact phase of cycle , you can get decent returns.
Disclosure: Invested and biased from 166 levels.
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