Lucknow, Read. Tata, a renowned Indian industrial company, has suffered a major blow from the African country Kenya. According to media reports, Kenyan President William Ruto has completely closed Tata Group's flagship unit 'Tata Chemicals Magadi' which is involved in the production of Soda Ash and is 100 years old. President William Ruto has also instructed Tata Chemicals to leave the country.
Overall, President William Ruto has ordered Tata to wind up its business in Kenya and leave the country. President William Ruto said that Tata Company has been making full use of Kenya's natural resources for the last 100 years, but is not doing any development at the local level. Rather it is benefiting India and Britain.
What is soda ash? ?
Soda ash, which is chemically called sodium carbonate ($Na_2CO_3$), is a white, odorless powder or granular chemical. It is one of the most used industrial chemicals in the world. It is used in everything from glass making to water treatment to balance the PH level of water and make it soft.
Why did this controversy arise?
This entire matter is related to 'Lake Magadi' located in Kajiado district of Kenya. This lake is a huge source of natural soda ash, which is used in making glass, detergents and chemicals. Since the era of British rule (1911), a local company had the mining rights from this lake, which was purchased by Tata Chemicals in the year 2005. President William Ruto says that the company has been using the natural resources here since the British era for the last 100 years, but it has not done much in the name of development at the local level.
Kenyan government's main allegations
The raw material export company extracts the raw material from Kenya and sends it directly to foreign countries, due to which Kenya is not getting any major economic benefit. On not setting up a processing plant, the President argues that Tata should have set up big factories manufacturing glass or other products within Kenya, so that local youth could get employment. The government is now strictly against sending out its natural wealth only in the form of raw materials.
Tata Chemical's response
Putting forward his point, Tata has said that his company has followed all the rules and regulations of the country and will do so in future also. How many people were getting employment at the expense of this company? By taking such a step, they are not only harming the company but also themselves. The company's stand is that their main work is extraction and purification of soda ash, making finished products (like glass) has not been a part of their business policy. The company has provided facilities like roads, hospitals, schools and drinking water for the local Maasai community. The company is trying to find a legal and negotiated solution to this issue with the Government of Kenya. Has been.
What circumstances are emerging now?
Entry of new companies: The Government of Kenya intends to give the mining rights of Lake Magadi to new companies who are ready to set up manufacturing plants there, hence the doors are now being opened for new companies. On the other hand, as soon as this news came, there was a decline in the shares of Tata Chemicals in the Indian stock market, because the Kenya plant is an important part of the company's global soda ash production. This year, this company has caused a loss of about 30% to the investors of India. In recent times, there has been an increase in strictness regarding the projects of Indian companies in Kenya. Such a stance on a company with the reputation of Tata Group could pose a new challenge to Indian investment in Africa.