MOSCOW (MRC) --Thai Indorama Ventures Public Company Limited (IVL), a global chemical producer, has announced that it has completed the share purchase of 83,000,000 newly issued shares in Indo Rama Synthetics (India) Limited (IRSL), equaling to approximately 31.79% of IRSL’s enlarged share capital at the price of INR 36 per share, as per the company's press release.
IRSL is a fiber manufacturing facility located in Nagpur, Maharashtra state, India. This facility has a combined capacity of 605,000 tonnes/ annum, consisting of polyester chips, fibers and filament yarns.
IRSL is a strong strategic fit with IVL’s Fiber strategy in home and apparel, where the company focuses on building a low-cost position in Asian operations and leveraging innovation in high-margin growth markets. This strategic investment provides IVL entry into a large domestic market where local presence gives duty and logistic benefits.
IVL has already invested in India over three years in the PET business. India is the second largest polyester market in the world after China with consumption growing at about 7.0% per annum, with a population of 1.2 billion. India’s per capita consumption of polyester is about 3 kg, compared to 14 kg in China. This low level per capita consumption is expected to increase along with the rise in India’s per capita GDP, which will provide affluence-related consumption and opportunities for growing into more functional and High Value-added (HVA) products. IVL is in a strong position to benefit from this evolving trend, backed by its strong R&D capabilities.
The textile industry contributes 15% of India’s exports and employs 4% of the population and therefore has an important part in India’s industrial policy.
Mr. Aloke Lohia, Group CEO of Indorama Ventures said, "This strategic investment is another step in executing our strategies to position IVL for sustainable growth. India has been on our radar for some time. It is the only large domestic market for fibers where we are not present. The market for fiber in India is expected to grow exponentially and is still largely untapped.
India is the largest textile market and IRSL has a key position. The strategic investment is expected to grow shareholder returns. This market has a large, untapped potential that will be highly lucrative as it expands.
As a company listed in the Dow Jones Sustainability Index, we put the circular economy and sustainability as a priority. We will bring our knowledge and expertise of recycling to play a role in the creation of awareness and practices thus protect the environment and society."
As MRC reported previously, in early February, 2019, IVL commenced production of purified terephthalic acid (PTA) and polyethylene terephthalate (PET) at plants it acquired from Artlant PTA in Portugal and EIPET in Egypt, respectively. IVL completed the acquisition of the 700,000-t/y PTA facility, located at the Sines industrial complex, in Late 2017. Value of the transaction, which included all equipment, surface rights and employment contracts, was not disclosed.
Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 19,000 employees worldwide and consolidated revenue of USD 10.7 billion in 2018. The Company is listed in the Dow Jones Sustainability Index (DJSI).