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Indorama to acquire PET producer in India

November 30, 2015
Chemical Value Chain

Indorama Ventures (Bangkok) today announced that it will acquire polyethylene terephthalate (PET) manufacturer Micro Polypet Pvt. Ltd. (MicroPet; New Delhi).

MicroPet’s PET plant is located at Panipat, 90 kilometers north of New Delhi and has a production capacity of 216,000 m.t./year. MicroPet is a joint venture of Action Group (New Delhi) and chemicals company RLG Group (Vadodara, India). Action Group began its operation as a footwear manufacturer and diversified into other sectors. Financial details of the acquisition, which is subject to necessary legal approvals, have not been disclosed. The transaction is expected to be completed in December. MicroPet is the only PET manufacturer in Northern India and its plant is integrated with Indian Oil Corp.’s (New Delhi) production site at Panipat, for its feedstock, purified terephthalic acid (PTA) and monoethylene glycol (MEG), Indorama says. MicroPet also has its own power plant. MicroPet uses melt-to-resin technology, which is also used at Indorama’s AlphaPet PET plant at Decatur, AL.

“This is a unique opportunity for us to establish a foothold in one of the world’s fastest-growing developing economies,” says Aloke Lohia, CEO of Indorama Ventures. “The acquisition strategically extends our footprint and scale and enhances our relationship with the world’s fast moving consumer goods brands, all of who have their eye on this huge consumer market. Since we are now firmly established in two of Asia’s largest population centers, China and Indonesia, India has been the missing piece of our Asian market access.” Lohia says that Indorama is entering India at an early stage of PET usage in the country, as per capita PET consumption in India in only 0.6 kilogram/year compared to 2.6 kilogram/year in China and 10.9 kilogram/year in the United States. Demand for PET in India is expected to grow at a CAGR of about 20% until 2020, Indorama says.

The demand for PET in North India is currently about 300,000 m.t./year, Indorama says. MicroPet currently has about 12% of the PET capacity share in India, Indorama says. The other producers are Reliance Industries (Mumbai), which has a 50% share, Dhunseri Petrochem (Kolkata, India), which has a 27% share, and JBF Industries (Mumbai), which has an 11% share, Indorama says. About 95% of the PET produced by MicroPet is sold in the domestic market and the remaining 5% is exported.

In Asia, Indorama currently has three PET production facilities in Thailand, two in Indonesia, and one production facility at Kaiping, China. . Earlier this year, Indorama acquired PET producer Bangkok Polyester, which operates a 105,000-m.t./year plant in Thailand. Indorama says it is the leading PET producer in Southeast Asia. In North America, Indorama has three PET production facilities in the United States and one in Mexico; in Europe, Indorama has four PET production facilities; and in Mideast and Africa, Indorama has two PET production facilities in Turkey and one in Nigeria. Earlier this month, Indorama purchased the PET, PTA, and purified isophthalic acid facilities of Cepsa (Madrid) at San Roque, Spain.

In early 2012, Indorama had announced that it would invest about $700 million to build an integrated facility in India, which will consist of PTA, PET, and polyester staple fiber production plants, and later that year Indorama told CW that the project in India will be located in the state of Tamil Nadu. That project has not yet moved forward.

By Deepti Ramesh

Source: Chemical Week

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