Turkey and US focused Kew Soda has published its registration document ahead of the proposed flotation on the premium list of the Main Market. The shares on offer will be sold by an existing shareholder. The focus will be institutions, but a Primary Bid offer of up to £6.95m is being considered.
Kew Soda owns West East Soda, which is the world’s largest producer of natural soda ash, which is an essential component for a variety of industrial processes. Glass manufacturing accounts for three-fifths of world demand. This could change with potential growth in demand for solar photovoltaic and lithium carbonate for electric vehicle batteries.
Global demand for soda ash is forecast to grow from 65 million metric tonnes to 81 million metric tonnes by 2030.
There are plans to invest $5bn to more than double production capacity by 2030. In 2022, the company produced 4.6 million metric tonnes of soda ash and 400,000 metric tonnes of sodium bicarbonate. The existing facility is in Turkey and there are two projects planned in the US.
In 2022, revenues jumped from $894m to $1.77bn and EBITDA was $838m, while cash flow soared from $303m to $741m. In the first quarter of 2023 revenues were $495m and EBITDA was $248m
Turkey-based industrial company Ciner Group is the current owner of Kew Soda, which has headquarters in the UK. There will be a free float of at least 10% with potentially a further 15% available through an over-allotment option. The offer is focused on institutions outside of the US.
The cash raised by the shareholder will be used to repay intercompany loans. That will then go towards reducing the net debt of the company.