16 March 2018
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Indorama Ventures Public Company Limited (IVL),
has announced that it has entered into an agreement
to acquire
M&G Polimeros Brazil S.A. in Ipojuca Brazil.
The plant is the largest PET facility in Brazil,
with capacity of 550,000 tonnes/ annum.
This plant is strategically located and benefits
from virtual integration with
a manufacturer of Purified Terephthalic Acid (PTA),
a key feedstock to PET.
The transaction is expected to be completed
in second quarter 2018, subject to regulatory approvals.
This acquisition in Brazil is in line with
the Company’s strategy to further extend its market position,
and expand its global footprint in key markets
with high growth potential.
This strategic position allows Indorama Ventures
to deliver products to key customers in Brazil
and elsewhere in a cost-effective and efficient manner.
Indorama Ventures is well positioned to service
its current global client base and
M&G’s existing customers once this acquisition
is complete and the plant is fully operational.
The Company expects immediate incremental revenues
and cost synergies, driven by a substantial volume increase
and potential value add through backward integration.
South America is an important emerging market
with domestic demand for PET growing at around 5%.
Today’s per capita consumption of PET is comparatively low
at 2.8 kg and has great potential for growth.
Brazil also has strong underlying fundamentals,
supported by government policies
to stimulate economic growth and strengthen the domestic market.
Indorama Ventures continues to be on
a transformational journey aimed at
accretive growth and sustainable value creation,
while maintaining financial discipline.
In its latest financial disclosure of 20 February 2018,
the Company announced its record EBITDA of US$ 1 billion for 2017
which was a growth of 30% on a year-on-year basis.
Significant improvement
in the PET and feedstocks business environment
also enabled
its net profit to grow by 68% on a year-on-year basis.
This is a testament to a well-developed strategy
and carefully selected acquisitions
backed by a prudent mix of products and geographies,
which ensure the sustainability of the Company.
This acquisition will significantly advance IVL’s strategy
in its Necessities business, where the Company
aims to deepen its global footprint and build scale in key markets.
HSBC is serving as financial advisor,
KPMG is serving as Finance and Tax due diligence advisors, and
Mattos Filho & Lowenstein Sandler is serving as Legal advisors.
Mr. Aloke Lohia,
Group CEO of Indorama Ventures
“We are pleased to have reached this agreement,
and taken significant action
to strengthen our capability for profitable growth.
Indorama Ventures now has unrivalled scale and global reach,
being present in five continents
with a uniquely balanced and integrated business model.”
“This is an exciting move for us,
reflecting our continued commitment to support our customers
using our global scale and local presence.
We look forward to capitalizing on this new market and opportunities
for cross-selling to immediately deliver greater value
to existing and new customers,
while delivering profitable growth and enhanced shareholder value."
Contacts
Richard Jones
Tel: +662.661.6661 ext. 680
richard.j@indorama.net
Naweensuda Krabuanrat
Tel: +662.661.6661 ext. 247
naweensuda.k@indorama.net
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