Sector News

Soda ash producer WE Soda plans IPO, London share listing

June 3, 2023
Energy & Chemical Value Chain

WE Soda (London), a major producer of soda ash, said it intends to launch an IPO and apply to list its shares on the main market of the London Stock Exchange. The company, wholly owned by industrial conglomerate the Ciner Group (Istanbul, Turkey), said it is the world’s largest producer of natural soda ash.

The IPO would be comprised of ordinary shares to be sold by privately owned Ciner. Immediately following the start of trading, WE Soda would have a free float of at least 10% of its issued share capital and expects that it would be eligible for inclusion in the FTSE UK indices. It is also anticipated that shares representing up to a further 15% of the IPO would be made available following an over-allotment option.

If the IPO goes ahead, WE Soda has engaged JP Morgan Securities as sole sponsor, joint global co-ordinator and joint bookrunner for the IPO; BNP Paribas and Goldman Sachs International as joint global co-ordinators and joint bookrunners; and the London branch of Deutsche Bank AG together with Liberum Capital Ltd., Morgan Stanley & Co. International PLC, MUFG Securities EMEA PLC and Numis Securities Ltd. as joint bookrunners.

Separately from, and in addition to, the IPO, WE Soda is considering making an exempt public offer of shares to retail investors in the UK, through the PrimaryBid platform, of up to €8 million.

WE Soda had revenue of $1.77 billion in 2022, rising from $892 million in 2021, partly as a result of capacity additions. Adjusted EBITDA was $838 million last year, almost doubling from $431 million in 2021. In the first quarter of 2023, the company had sales of $495 million and adjusted EBITDA of $248 million.

The company said that in 2022, its total output was approximately 5.0 million metric tons (MMt), comprising 4.6 MMt of soda ash and about 400,000 metric tons of sodium bicarbonate.

WE Soda said it produces natural soda ash from trona ore using the solution-extraction method, which is “significantly more environmentally friendly” than synthetic production methods. “We are the only soda ash producer outside China to use the solution-extraction production method on a commercial scale and, as a result, we have by far the cleanest and most environmentally friendly production process in our industry, with the lowest CO2e emissions intensity, the lowest energy and water intensity and almost no waste by comparison with other production methods,” said Alasdair Warren, CEO of WE Soda.

Based on research and analysis from consulting firm Advancy, WE Soda said it is also one of the lowest-cost producers of soda ash globally, primarily because the solution-extraction method has “a significantly lower cash cost of production by comparison with synthetic soda ash production,” mainly because it has lower energy intensity and lower raw material input costs.

WE Soda said it is pursuing a number of initiatives through which it is seeking to improve further its operating margins in the short-to-medium term, by generating a price premium for its products relative to other soda ash producers or by reducing its cost of delivery, mainly through driving increased efficiency and reduced cost in its global customer supply chain while maintaining or increasing its levels of customer service and supply-chain reliability.

The company operates two large-scale production facilities near Ankara, Turkey, known as Eti Soda and Kazan Soda, which in 2022 produced approximately 2 MMt and 3 MMt, respectively, of soda ash and sodium bicarbonate, combined. The group also has a stake of about 20% in the Sisecam Wyoming production facility at Green River, WY, operated by Sisecam Chemicals USA Inc.

WE Soda said it had invested approximately $2 billion over the last 10 years, of which approximately $1.4 billion was invested at Kazan Soda and approximately $600 million was invested at Eti Soda.

“We operate two large modern production facilities in Turkey and because of our production method and the structure of our industry, we are able to deliver high operating margins, generating strong free cash flow,” Warren said.

Expanding capacity in Turkey, US

WE Soda said it aims to more than double its total annual production from 5 MMt to 11 MMt by 2030 — of which more than 90% will be soda ash — by investing a total of approximately $5 billion into three major projects, including two greenfield projects in Wyoming and an expansion of Kazan Soda in Turkey.

Kazan Soda’s capacity is targeted to rise from about 3 million metric tons per year (MMt/y) to approximately 4 MMt/y by 2026. The group expects that Kazan Soda’s capacity and sales volumes will increase by about 200,000 metric tons per year in 2023, mainly due to the commissioning that was completed during the first quarter of additional caustic and decahydrate units, increasing combined soda ash and sodium bicarbonate production capacity at Eti Soda and Kazan Soda to about 5.2 MMt/y. In addition, the group plans to construct a 500,000 metric tons per year soda ash production unit and an additional 100,000 metric tons per year sodium bicarbonate unit at Kazan Soda. If developed as planned, these new units would be constructed during the next two years, with commissioning expected in the third quarter of 2025 to achieve full run-rate production during the fourth quarter of 2025. The new units would raise the combined capacity for soda ash and sodium bicarbonate at the group’s facilities in Turkey to 6 MMt/y by 2026.

WE Soda said it has “long-life, high quality” trona reserves with estimated minimum remaining life of mine of approximately 20 years at Eti Soda and about 28 years at Kazan Soda.

One of the Wyoming projects, called Pacific Soda, is “an early-stage greenfield development project, currently in the preliminary engineering design, research and development and permitting phase,” WE Soda said. It is 60% owned and controlled by Sisecam with WE Soda owning the remaining 40% and providing the solution-extraction technology for the project. If developed as planned, the targeted production capacity is 5.4 MMt/y, consisting of about 5 MMt/y of soda ash and 400,000 metric tons per year of sodium bicarbonate. Pacific Soda is not expected to receive final permitting approvals to allow the start of construction until the second half of 2024, at the earliest, and it is not expected to achieve full run-rate production until 2027, at the earliest, when WE Soda’s share of production will be approximately 2 MMt/y of soda ash and 200,000 metric tons per year of sodium bicarbonate, it said.

The other Wyoming project, dubbed West Soda, is “an early-stage greenfield development project, still in the conceptual early design and pre-permitting phase,” which is 100% owned by WE Soda. The West Soda project is currently not expected to be onstream before 2030 and, if developed as planned based on preliminary management estimates, will have a targeted production capacity of 2.5-3.0 MMt/y, WE Soda said.

“We believe we are investing more and growing faster than any other company within our industry…mainly through new growth projects in the US,” Warren said.

WE Soda cited data from Advancy, which show that the glass industry accounted for about 60% of global soda ash demand in 2022. Soda ash is also used in architectural flat glass for building construction to improve thermal efficiency; photovoltaic glass used in solar panels; container glass used to produce glass bottles; in the manufacture of lithium carbonate used in electric vehicle batteries; powdered detergents; and silicates and sodium chemicals.

Advancy forecasts that from almost 65 MMt in 2022, total worldwide soda ash demand will grow to almost 81 MMt by 2030, equivalent to a compound annual growth rate of 2.8%, or approximately 2 MMt of additional soda ash consumption every year. “Demand for soda ash is resilient partly because approximately 75% of forecast global growth by 2030 is expected to be driven by sustainable applications facilitating the energy transition, most of which exhibit long-term, non-cyclical structural growth,” WE Soda said.

The EMEA region, including Turkey, is WE Soda’s core geographic market and in 2022 represented 73% of the company’s combined sales volumes of soda ash and sodium bicarbonate. Western Europe and Turkey are the group’s single largest markets, representing 45% and 20%, respectively, of sales volumes in 2022 with 16% of group sales by volume in the Americas.

By Ian Young


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