BANGKOK — April 3, 2019 — Indorama Ventures Public Co. Ltd. (IVL), a global chemical producer, announced that it has completed the share purchase of 83,000,000 newly issued shares in Indo Rama Synthetics (India) Ltd. (IRSL), equaling to approximately 31.79 percent of IRSL’s enlarged share capital at the price of INR 36 per share. IRSL is a fiber manufacturing facility located in Nagpur, Maharashtra state, India. This facility has a combined capacity of 605,000 tonnes/annum, consisting of polyester chips, fibers and filament yarns.
IRSL is a strong strategic fit with IVL’s Fiber strategy in home and apparel, where the company focuses on building a low-cost position in Asian operations and leveraging innovation in high-margin growth markets. This strategic investment provides IVL entry into a large domestic market where local presence gives duty and logistic benefits.
IVL has already invested in India over three years in the PET business. India is the second largest polyester market in the world after China with consumption growing at about 7.0 percent per annum, with a population of 1.2 billion. India’s per capita consumption of polyester is about 3 kg, compared to 14 kg in China. This low level per capita consumption is expected to increase along with the rise in India’s per capita GDP, which will provide affluence-related consumption and opportunities for growing into more functional and High Value-added (HVA) products. IVL is in a strong position to benefit from this evolving trend, backed by its strong R&D capabilities.
The textile industry contributes 15 percent of India’s exports and employs 4 percent of the population and therefore has an important part in India’s industrial policy.
Aloke Lohia, group CEO of Indorama Ventures, said: “This strategic investment is another step in executing our strategies to position IVL for sustainable growth. India has been on our radar for some time. It is the only large domestic market for fibers where we are not present. The market for fiber in India is expected to grow exponentially and is still largely untapped.
India is the largest textile market and IRSL has a key position. The strategic investment is expected to grow shareholder returns. This market has a large, untapped potential that will be highly lucrative as it expands.
As a company listed in the Dow Jones Sustainability Index, we put the circular economy and sustainability as a priority. We will bring our knowledge and expertise of recycling to play a role in the creation of awareness and practices thus protect the environment and society.”
Posted April 3, 2019
Source: Indorama Ventures (IVL)