'Not delivered sufficient value' - Reason why this famous Tata Group firm got exit orders from Kenya President

Kenyan President William Ruto on Thursday said that his government had directed Tata Chemicals to halt its operations in the country, citing that the Indian company’s presence had not delivered sufficient value to Kenya, according to Reuters.

Ruto said two new companies would be brought in to take over the operations currently handled by Tata Chemicals.

The development follows a decision in late July, when Tata said the Kenyan government had instructed its subsidiary, Tata Chemical Limited, to suspend activities at the Magadi Soda factory and stop exporting soda ash.

While during a visit to the region in Southern Kenya, Ruto stated, “That TATA company ... had that contract for 100 years. They have not built anything in Kajiado, they have not built any factory in Kajiado.”

“We have said we will bring a new company and... they should put a big glass company here in Kajiado. And another company to make chemicals here in Kajiado. Are we slaves to other people?” he asked.

The company was not immediately available for comment on President Ruto’s move, Reuters said.

Kenya’s mining ministry had asked Tata Chemicals Magadi Ltd. to halt operations about five weeks earlier, citing unpaid royalties and non-compliance with regulatory requirements.

‘Pack and go’

Kajiado Governor Joseph Ole Lenku also said the company’s mining rights had lapsed in 2023. Kenya has been extracting soda ash for more than a century, with Tata acquiring the operation from Brunner Mond Ltd. in 2005.

At a public rally in Kajiado, he stated any company granted future rights to extract soda ash would be expected to establish large-scale processing facilities locally, including plants for manufacturing glass and chemicals.

“Those who we will license to extract the resource must build a huge processing facility here to produce glass. They should build a big factory to produce chemicals here," Bloomberg quoted him as saying.

“Come what may, because they have been unable able to do what is required, I have told them to pack and go,” Ruto added.

What Tata Chemicals had said

In July, Tata Chemicals maintained that it remains in line with applicable regulations and is engaging with government authorities and relevant agencies to address the issue and ensure continued adherence to regulatory requirements.

Tata Chemicals stated in a statement that it is “fully compliant with all requisite regulations and continues to work with all authorities and agencies to uphold the highest standards of compliance.”

Kenya is the world’s fourth-largest producer of natural soda ash, contributing about 1% of global output, according to the US Geological Survey. The mineral, also called sodium carbonate, is widely used in products such as cleaning agents and batteries for electric vehicles.