IVL kicks off Mexican automotive fibre acquisition
SET-listed Indorama Ventures Plc (IVL), a maker of intermediate petrochemicals, has entered the process of acquiring DuraFiber Technologies (DFT) in Mexico to strengthen its position in the automotive fibre market.
IVL president and chief executive Aloke Lohia said DFT is a leading Mexican maker of durable technical textiles for industry, tyre reinforcement and speciality applications that will help IVL enter the auto parts business.
DFT's Queretaro plant in Mexico has an annual capacity of 37,500 tonnes of polyethylene terephthalate (PET) and other high grades of PET that are used in tyre cord fabrics and industrial and industrial textiles.
PET products are used in a wide range of applications, including reinforcement for conveyor belts, hoses, single-ply roofing, tents, automotive airbags, seat belts, safety harnesses and ropes.
Mr Lohia said the transaction is expected to be completed in the third quarter of 2017, subject to the usual regulatory approvals, including approval by the Mexican Antitrust Commission.
IVL has also agreed to acquire DFT's operations in Longlaville, France, which have a capacity of 35,000 tonnes of PET per year, subject to a definitive agreement once the relevant regulatory approvals and employee approvals are granted.
"The acquisition of DuraFiber aligns with our strategy of pursuing accretive growth opportunities in the high-value-added (HVA) automotive segment," Mr Lohia said. "DuraFiber's portfolio complements our HVA tyre cord fabric products in Europe and are a strong fit with our existing PET site in Mexico."
He said the automotive and parts segment is projected to grow around 6% during 2017-21.
Automotive parts are a key growth driver in IVL's HVA portfolio. PET is still considered the backbone of the company, while HVA accounts for 50% of IVL's core revenue.
The company's focus remains on driving its global innovation agenda to strengthen the company's capabilities in the value chain, said Mr Lohia.
IVL posted a 11% revenue rise to US$2.09 billion (69.5 billion baht) in the second quarter of this year, which it attributes to prudent investments in HVA businesses, particularly integration into key feedstock in balanced markets and timely investments in key regions.
IVL shares closed yesterday on the Stock Exchange of Thailand at 38.25 baht, up one baht, in trade worth 1.16 billion baht.