GHCL Seeks Anti-Dumping Duty as Cheap Chinese Imports Squeeze Margins

GHCL Ltd, India's second-largest soda ash producer, has approached the government seeking anti-dumping duties on soda ash imports from China and other global exporters, as cheap shipments flood the domestic market and erode local producers' margins, the company's managing director said.

The move comes as import share has nearly doubled to 25-26% from a historical 15%, intensifying pressure on India's synthetic soda ash industry, which lacks access to low-cost natural reserves available in countries like China, Turkiye, the US and Kenya.

India accounts for only 6% of global soda ash demand but has been growing at 6% annually, significantly outpacing the global average.

"We have also gone to the government for a protection from this dumping which is being done by the global players and we are seeking a kind of help from the government on that," GHCL Managing Director R S Jalan told PTI.

The urgency stems from China's dominance of 45% of global soda ash capacity and recent additions of over 10 million tonne in Inner Mongolia, which have created a surplus situation in the global market.

The Directorate General of Trade Remedies (DGTR) is probing the allegations following petitions from domestic firms including GHCL, with an oral hearing rescheduled for later this month.

India extended the minimum import price (MIP) of ₹20,108 per tonne on soda ash until December 31, but GHCL's MD described it as offering only "some small benefit" since sub-MIP inflows continue unabated. The curbs, first notified in 2023, aim to check predatory pricing but fall short against surplus-driven dumping.

"But at this point of time, we are seeing quite a big surge in imports. After the MIP, there is only one thing which is anti-dumping duty which we are pursuing with the government and let us see how things come.

"That will be a very scientific process by which the government looks at many parameters in terms of your margin erosion or the minimum benchmark of the price, what is the import, at what price import is happening," the MD explained, adding that it is a quasi-judicial body with defined rules that will assess what kind of protection the industry needs.

However, he clarified that anti-dumping duty is not a permanent solution. "Anti-dumping duty is primarily a way of protection for a short period of time. That's not the right permanent solution for any competitor," he said, emphasizing that the Indian industry must enhance cost competitiveness to compete globally without compromising margins.

Despite the challenging environment, GHCL is operating at 98 per cent capacity utilization, demonstrating continued strong domestic demand.

The company, which holds a 26% domestic market share, has buffered the impact through cost efficiencies, limiting a 19% year-on-year price drop to just a 5% margin erosion in Q1 FY26.

"Last year, the soda ash price dropped by 19% whereas our margin dropped by only 5%. So this 14% we have been able to cover by our efficiency and by challenging the cost," the MD said.

Standalone Q1 net profit slipped 4% to ₹145 crore on revenue of Rs 823 crore, down 3% amid softer realisations.

"One disadvantage India has is that it doesn't have natural soda ash. Mongolia, US, Turkiye have natural soda ash. That natural soda ash is almost half of the cost of the synthetic soda ash," the MD said, adding that this challenge will continue.

To protect market position, the company is focusing on continuous cost optimization and superior customer service. The company's unique 12-hour delivery service to customers has helped it maintain market leadership despite pricing pressures.

"We are servicing customers in 12 hours, so these are the uniqueness which we have created over a period of time," the MD said.

The surplus from China, estimated at 10 million tonnes added in Inner Mongolia over the past two years, has flooded global markets with low-cost supply.

"They just want to dump at any price because they have to sell somewhere which is not economical. They just want to dump it," the MD explained.

India accounts for just 6 per cent of worldwide demand but is growing at 6 per cent annually.

The company is banking on India's solar energy ambitions, projecting an extra 1 million tonne (MT) of soda ash demand over five years from solar glass expansion, as the government eyes 300 GW capacity from 119 GW currently. To capture this demand, GHCL is doubling output to 2.2 MT annually via a ₹6,500-crore greenfield plant in Gujarat.

The government provided support to the solar glass industry last year through anti-dumping duties and PLI incentives.

"The total demand growth will be more than a million tonne in the next five years and we are coming up with a plant of a million tonne," the MD said, adding that the company also has natural export markets like Bangladesh and Sri Lanka to cater to.

The MD also noted that a recovery in global demand, particularly in Europe and China, could naturally ease import pressure. "If the global demand growth goes up by 1%, then that also will help the domestic industry to have less volume coming into India," he said.

"Soda ash is a cyclical business, but our 40-year track record of execution positions us as the low-cost leader," the MD said.

"At this point of time, margins are under pressure, but the demand growth which we are seeing, lot of large investments are taking place into the solar glass," he added.

The MD noted that China's soda ash sector grew at 10-18% in 2023-24, outpacing the global growth rate of 3-4%. "Some volume has got absorbed into China itself. And over a period of time, in another one or two years, this capacity will get absorbed into the global market."