Soda ash

Soda ash is one of the basic raw materials for the glass manufacturing industry. It is also used for the production of washing and cleaning products, in metallurgy and chemical industry, among others, to produce certain types of mineral fertilizers as well as dyes and pigments. On a global scale more than one half of the currently produced soda ash is used for the production of glass. Further recipients of soda ash include the soap and detergent producers and the chemical industry. 1/5 of soda is used by other branches of industry. 

In Europe, the share of glass manufacturers and metallurgy sector in soda ash purchases is much larger than on the global market. On the other hand, in Europe relatively lower volumes of soda are used in the production of soap and detergents.
The global production capacities of soda ash are estimated at about 65 million tonnes per year, of which over half is produced in Asia. The remaining potential is almost evenly spread between Europe and North America, which possess comparable production capacity. The largest soda ash producers in the world, with capacity of more than 3 million tonnes/year, are the following three concerns: Solvay, Tata Chemicals and Tronox. These companies have at their disposal a total of nearly 1/4 of global capacities.

It is estimated that by the end of the current decade, the significant increase in production capacity will take place: in the Middle East (more than 3.5 million tonnes/year, mainly in Turkey, based on trona deposits) and on the Indian sub-continent (more than 1.5 million tonnes/year).  

The main soda ash market for CIECH Group is Europe (including CIS), especially Poland. The biggest producer in this region is Solvay company, which owned factories in 6 locations around Europe in 2016, with total production capacities estimated at approximately 5 million tonnes/year. CIECH Group is on the second position in the European market with production capacities of 2.6 million tonnes. 4 production plants of the CIECH Group are located in Poland (Inowrocław and Janikowo), Germany (Stassfurt) and Romania (Ramnicu Valcea).

The CIECH Group is the sole producer of soda ash in Poland and Romania. The Group’s share of the soda ash market in Poland reaches approx. 95%, around 16-18% in Europe and about 4% globally (own estimates based on market data compiled by IHS Chemical).  

Demand for soda ash in Europe (including CIS) is estimated at approx. 11 million tonnes per year. European (including Polish) soda ash market is a mature market with no rapid changes, with yearly growth rates rarely exceeding several percent. Growth dynamics in Central and Eastern Europe is usually higher by 1-2 percentage points than in Western Europe. 

The structure of soda ash consumption hasn’t changed much for many years. The demand for soda ash depends mostly on the demand for flat and packaging glass. In Central Europe, the share of the detergent segment is relatively significant, and in Eastern Europe – the share of metallurgical sector.

According to the data provided by IHS, the European soda market is currently balanced. The availability of new production capacities may result in a temporary oversupply of the product in Europe and in the neighboring regions (also on the markets where CIECH Group operates), however it is difficult to currently estimate the potential impact of this development.  At the beginning of the next decade, the increase in capacities should be balanced by a stable growth in soda demand.

The CIECH Group has a diversified portfolio of customers – the largest soda customer accounts for less than 6% of the Group’s revenues. The Group is focused on building sustainable and long-term relations with customers.

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