BANGKOK, Thailand — Indorama Ventures Public Co Ltd. (IVL), a global chemical producer, has announced that it has entered into an agreement to acquire DuraFiber Technologies México Operations, S. A. DE C. V. (DFT), a Mexican producer of durable technical textiles for industrial, tire reinforcement, and specialty applications globally. DFT’s Queretaro plant in Mexico (co-sited with IVL Mexico) has a capacity to produce a total of 37,500 tonnes/annum of PET High Modulus Low Shrinkage (PET HMLS), PET Heavy Denier Industrial (PET HDI) and nylon 6 fully-integrated into tire cord fabrics and industrial and industrial textiles. Its 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. The transaction is expected to be completed in the third quarter of 2017, subject to the usual regulatory approvals (including the approval by the Mexican Antitrust Commission). Concurrently with this planned acquisition in Mexico, IVL has agreed to also acquire DuraFiber Longlaville, France, having a capacity of 35,000 tonnes/annum, again subject to a definitive agreement, the relevant regulatory approvals and employee approval.
Commenting on the acquisition, Aloke Lohia, Indorama Ventures group CEO, said: “The acquisition of DuraFiber is strongly aligned with our strategy of pursuing accretive growth opportunities in the high value-added automotive segment. DuraFiber’s portfolio is a complementary fit with our current HVA tire cord fabric products in Europe and a strong fit with our existing PET site in Mexico. DuraFiber is a strong brand with recognized products with deep insights into the market combined with IVL’s global scale will enable us to better meet customers’ evolving needs.”
The market is projected to have a growth rate around 6 percent CAGR in 2017-2021. DuraFiber is the sole domestic tire cord fabric producer in Mexico with products approved by major global tire companies.
“The automotive segment is a key growth driver in IVL’s HVA portfolio that will bring exciting developments to the company,” Lohia added. “While PET is still an important backbone for the company, HVA is now accounting for 50 percent of IVL’s core EBITDA. Our focus remains on delivering best-in-class propositions, while driving our global innovation agenda to strengthen the company’s capabilities in the value chain where we are present. I am confident that with the transformational strategy to consolidate our leadership position in key businesses and markets, IVL delivers significant value to our shareholders.”
Key points:
- Complementary addition to IVL’s Automotive Segment, further strengthening its leading position in US$ 10 billion+ automotive fiber market.
- A complete portfolio of tire cord fabric products makes IVL the leading fiber partner for the automotive industry.
- Gains significant presence in Mexico (Americas) and European markets.
- Synergies across product lines and markets in IVL core business and site integration with IVL Mexico.
- Delivers immediate value accretion.
Source: IVL
Indorama Ventures DuraFiber Technologies Indorama Ventures DuraFiber Technologies Indorama Ventures DuraFiber Technologies Indorama Ventures DuraFiber Technologies
Indorama to buy tire cord makers in Mexico and France
Thai plastics producer raises its bet on high-value automotive products
YUKAKO ONO, Nikkei staff writer
BANGKOK — Indorama Ventures, the Thailand-based petrochemical producer, said Tuesday it is planning to buy tire-cord fabric makers in Mexico and France, as it expands its reach in the automotive sector on the back of rising demand for lightweight, high-performance materials.
The company has agreed to acquire DuraFiber Technologies Mexico by the third quarter of this year and will finalize an agreement to purchase of DuraFiber Longlaville of France around the same time. The value of the transactions has not been disclosed.
The Thai company is diversifying into more high value-added products. The automotive industry is a “key growth driver,” CEO Aloke Lohia said in a statement. At present, high value-added materials account for half of Indorama’s earnings before interest, tax, depreciation and amortization.
The company foresees a rise in demand for materials used in electric vehicles and self-driving cars. Production of lightweight cars is set to increase by more than 30% over the 10 years through 2025 to 118 million vehicles a year, it estimates.
DuraFiber was previously called Performance Fibers, changing its name after Indorama acquired the global rights to the Performance Fibers brand in 2015 when it acquired Performance Fibers China from a U.S. investor.
DuraFiber is the only maker of tire fiber cords in Mexico and supplies global tire companies in the Americas. It sources material from Indorama’s PET plant in Mexico, located on the same site as DuraFiber’s factory.
The Mexican plant makes nylon tire cord fabric and high-performance industrial textiles that are used in products such as conveyor belts, hoses, air bags, seat belts and safety harnesses. It has a total capacity of 37,500 tons annually.
The French plant will mainly supply the European market.