The upgrade is part of a strategic plan to boost efficiency and is expected to contribute to a significant increase in the company's EBITDA for the fiscal year 2026
Tata Chemicals Ltd, a key subsidiary of the Indian conglomerate Tata Group, is set to undergo a major operational shutdown at its Kenyan facility in Lake Magadi. This temporary halt is a strategic move to commission a new, state-of-the-art 50-kiloton calciner, an industrial furnace crucial for processing soda ash. Despite the planned pause and a "slightly lower volume" from its East African operations in the first quarter of fiscal year 2026, the company has assured stakeholders that it holds sufficient inventory to prevent any disruption to the local and international supply of its primary product.
The shutdown is part of a broader expansion strategy by Tata Chemicals to enhance capacity and boost efficiency at its Kenyan operations, where it extracts and processes soda ash (sodium carbonate) from a unique natural deposit at Lake Magadi. Soda ash is a vital ingredient used in a wide range of industrial applications, including the manufacturing of glass, detergents, chemicals, and paper, as well as in water treatment.
Speaking during a July 25 earnings conference call, company executives addressed the impending shutdown directly, emphasizing that it is a temporary measure for a crucial upgrade. “We have a big shutdown planned in Kenya, but we have enough stocks to serve the market in the second quarter," an executive confirmed to investors. The new 50-kiloton calciner, which is currently in its trial run phase, is slated to begin commercial product delivery to the market sometime during the second quarter of 2026.
The earnings call also provided insights into the Kenyan unit’s performance, which saw a sequential dip in margins during the first quarter of 2026. Tata Chemicals Ltd Chief Executive R. Mukundan attributed this decline to a higher proportion of sales being directed to Southeast Asia, a less lucrative market compared to the local African one. Mukundan, however, expressed confidence that this sales mix is a temporary fluctuation and is expected to normalize, bringing margins "back to normal" as the fiscal year progresses.
The new calciner's contribution is a cornerstone of the company’s broader strategy, which aims for a structural Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) improvement of INR 600-650 crores for the full fiscal year 2026. This translates to an expected EBITDA improvement of approximately Sh990 million to Sh1.07 billion at the current exchange rate. This significant financial target underscores the company’s belief that the strategic upgrades will yield substantial long-term benefits, solidifying its market position and contributing to its overall profitability.
