SET-listed Indorama Ventures Plc (IVL), a leading manufacturer of polyester and plastic packaging material, has completed the acquisition of 74% of Medco Plast for Packing and Packaging Systems from Middle East Glass Manufacturing Co (MEG) and the Samaha family.
After the acquisition, MEG has a 16% share of Medco Plast and the Samaha family has 10%.
Medco Plast is the largest manufacturer of recyclable PET preforms, injection-moulded products and closures for all multinational soft drink and water makers operating in Egypt, with a 25% market share.
Medco Plast has 11 production lines with a combined annual production capacity of 70,000 metric tonnes of PET preforms.
Egypt is one of the most developed and diversified economies in the Middle East, with 5% economic growth.
This acquisition will provide IVL exposure to East Africa's PET packaging market, complementing the existing footprint in West Africa, where IVL has a presence in Nigeria and Ghana.
Aloke Lohia, IVL's chief executive, said the acquisition of Medco Plast aligns with IVL's strategic focus, which includes capitalising on growth opportunities in emerging markets.
"Medco Plast has a strong presence in the domestic market and a long-standing customer relationship with all beverage majors operating in Egypt," Mr Lohia said. "This will enable IVL to support growing local customer demand and provide a platform for further growth in the Middle East and African regions."
Abdul Galil Besher, MEG's chairman, said the transaction with IVL will add considerable depth to the existing technical strengths and business and management capabilities that Medco Plast needs to become a world-class supplier to the beverage, pharmaceutical and personal care sectors in the region.
"MEG will be able to deleverage following the aggressive acquisition programme started in 2014 and focus more closely on driving the efficiency and performance of its core glass container business," Mr Besher said.