INDORAMA
Takeover of M&G Polimeros Brasil / Largest PET plant in Brazil is back-integrated
World’s largest PET producer, Indorama Ventures (Bangkok / Thailand; www.indoramaventures.com), is acquiring M&G Polimeros Brasil (Ipojuca / Brazil), subsidiary of insolvent Mossi & Ghisolfi Group (M&G, Tortona / Italy; www.gruppomg.com), for an undisclosed sum. The Brazilian firm operates the country’s biggest PET plant, which has a capacity of 550,000 t/y. According to Plasteurope.com’s Polyglobe database (www.polyglobe.net), the facility is back-integrated into key PTA feedstock, with none of these Brazilian plants currently on stream.
M&G entered insolvency proceedings in October 2017, and its US subsidiary M&G Polymers USA (Apple Grove, West Virginia) a few days later filed for Chapter 11 protection from creditors – see Plasteurope.com of 24.10.2017 and 27.10.2017. The Italian group subsequently halted all production facilities worldwide.
With the takeover, expected to close in this year’s second quarter, subject to regulatory approvals, Indorama will expand its footprint in South America. The Thai group said the Brazilian buy reflects its strategy to further improve its position and expand in key markets with high growth potential. It said it will be “well positioned to service its current global client base and M&G’s existing customers once the acquisition is complete and the plant is fully operational.”
Indorama calculates that the acquisition should provide “immediate incremental revenues and cost synergies, driven by a substantial volume increase and potential value add through backward integration.” Domestic demand for PET in South America’s emerging markets is seen to be growing at around 5% annually. With per capita consumption comparatively low at 2.8 kg, there is significant growth potential, the Thai player said, particularly as Brazil has “strong underlying fundamentals, supported by government policies to stimulate economic growth and strengthen the domestic market.”
In buying M&G’s Brazilian business, Indorama has taken “significant action” to strengthen its capability for profitable growth,” said CEO Aloke Lohia, adding that it now has “unrivalled scale and global reach, being present in five continents with a uniquely balanced and integrated business model.” Going forward, he said the group intends to “capitalise on this new market and opportunities for cross-selling.”
M&G entered insolvency proceedings in October 2017, and its US subsidiary M&G Polymers USA (Apple Grove, West Virginia) a few days later filed for Chapter 11 protection from creditors – see Plasteurope.com of 24.10.2017 and 27.10.2017. The Italian group subsequently halted all production facilities worldwide.
With the takeover, expected to close in this year’s second quarter, subject to regulatory approvals, Indorama will expand its footprint in South America. The Thai group said the Brazilian buy reflects its strategy to further improve its position and expand in key markets with high growth potential. It said it will be “well positioned to service its current global client base and M&G’s existing customers once the acquisition is complete and the plant is fully operational.”
Indorama calculates that the acquisition should provide “immediate incremental revenues and cost synergies, driven by a substantial volume increase and potential value add through backward integration.” Domestic demand for PET in South America’s emerging markets is seen to be growing at around 5% annually. With per capita consumption comparatively low at 2.8 kg, there is significant growth potential, the Thai player said, particularly as Brazil has “strong underlying fundamentals, supported by government policies to stimulate economic growth and strengthen the domestic market.”
In buying M&G’s Brazilian business, Indorama has taken “significant action” to strengthen its capability for profitable growth,” said CEO Aloke Lohia, adding that it now has “unrivalled scale and global reach, being present in five continents with a uniquely balanced and integrated business model.” Going forward, he said the group intends to “capitalise on this new market and opportunities for cross-selling.”
20.03.2018 Plasteurope.com [239318-0]
Published on 20.03.2018
German version of this article...