MOSCOW (MRC) -- Thailand-based Indorama Ventures Public Company Limited (IVL), a global chemicals producer, has announced it agreed to acquire Brazil-based Oxiteno S.A. Industria e Comercio, a subsidiary of Ultrapar Participacoes S.A. for USD1.3 bln,, as per the company's press release
The acquisition gives IVL a unique portfolio in high-value surfactants and significantly extends its existing Integrated Oxides and Derivatives (IOD) business.
Oxiteno is a leading integrated surfactants producer, catering to highly attractive end-use markets in LATAM. The acquisition brings an excellent management team, world-class expertise in green chemistry innovation, strong customer relationships in Brazil, Uruguay and Mexico, and substantial growth potential in attractive end markets, including the US through a new facility in Pasadena, Texas. Oxiteno has a strong commitment to environmental governance, and its focus on lowering greenhouse gas emissions will also enhance IVL’s ESG credentials.
Through the acquisition, IVL will assume a unique market position in technologies catering to niche, IP-rich and value-added applications in home & personal care, agrochemicals, coatings and oil & gas markets. The surfactants market has seen consistent growth over the last decade, driven by trends in population growth, urbanization and increasing hygiene awareness amid the Covid-19 pandemic.
With 11 manufacturing plants, customers in 4 continents, and an experienced management team, Oxiteno will complement IOD’s footprint in the USand Latin America, while its 5 research and technology centers will add to IVL’s innovation credentials in green chemistry. The extended footprint has potential to drive expansion in Europe and Asia by leveraging on IVOX’s surfactants business in Australia and India and IVL’s global presence in 34 countries. IVL expects to realize synergies of USUSD100 million by 2025 through portfolio adjustments, asset optimization and operational excellence.
IVL will purchase Oxiteno for USUSD1.3 billion (subject to adjustments at closing), with a deferred payment of USD150 million in 2024. The transaction is subject to customary conditions to closing, including approval of relevant regulatory authorities. The transaction is expected to close in Q1 2022 and will be earnings accretive immediately.
Financing is secured through deferred payment, using existing extra cash on our balance sheet, free cash flow generated from existing businesses, short term loans against working capital and the balance as long-term debt.
As MRC reported earlier, in July 2021, IVL, a large producer of recycled polyethylene terephthalate (rPET) for beverage bottles, has announced plans to build a facility in Karawang, Indonesia, to recycle almost 2 billion plastic bottles a year in support of the Indonesian government’s plan to reduce ocean debris. The facility, which is planned to open in 2023, will recycle 1.92 billion PET bottles annually and will employ 217 people.
The plant will provide the washed and shredded postconsumer bottles as PET flake feedstock to produce recycled resin that is suitable for food-contact use.
According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 411,200 tonnes in the first six month of 2021, up by 12% year on year. Russian companies processed 62,910 tonnes in June, compared to 85,890 tonnes a month earlier.
Indorama Ventures Public Company Limited, listed in Thailand (Bloomberg ticker IVL.TB), is one of the world’s leading petrochemicals producers, with a global manufacturing footprint across Africa, Asia Pacific, Europe and Americas. The company’s portfolio comprises Integrated PET, Olefins, Fibers, Packaging and Specialty Chemicals. Indorama Ventures products serve major FMCG and automotive sectors, i.e. beverages, hygiene, personal care, tire and safety segments. Indorama Ventures has approx. 24,000 employees worldwide and consolidated revenue of US$ 11.4 billion in 2019. The Company is listed in the Dow Jones Emerging Markets and World Sustainability Indices (DJSI).