Thailand's Indorama Ventures Public Company Limited (IVL), one of the world's leading petrochemicals producers and Dhunseri Petrochem Ltd. (Dhunseri), one of India's largest producers of PET (Polyethylene Terephthalate) Resin have agreed to enter into an equal joint venture to manufacture and sell PET resins for Indian domestic markets and for exports, IVL said in a press release.
Dhunseri will purchase a 50 per cent stake in the 216,000 tonne Micro Polypet Pvt. Ltd. (MicroPet), a company owned by Indorama Ventures in Haryana. IVL in turn will acquire a 50 per cent stake in a carved out entity, called Haldia, of Dhunseri, with an effective capacity of 480,000 tonnes PET manufacturing in West Bengal. The JV is subject to regulatory approvals and expected to complete in the second half of 2016.Thailand's Indorama Ventures Public Company Limited (IVL), one of the world's leading petrochemicals producers and Dhunseri Petrochem Ltd. (Dhunseri)#
PET usage is just 0.6 kg per annum in India compared to 2.6 kgper annum in China and 10.9 kg per annum in the US. This joint venture is a win-win for both producers with 700,000 tonne/annum of combined capacity in the strongest growth market having a population in excess of a billion people, as well as having favorable trade agreements with logistically advantaged countries in the region.
The joint venture will gain significant synergy benefits being the sole producer of PET Resin in North and East India and with both sites being effectively integrated with third party PTA suppliers, which will bring savings in SG&A and procurement.
IVL's global market reach and high utilization rates are expected to supplement Haldia's location benefit at Eastern India's largest port while MicroPet enjoys a strong location advantage in the high-demand territory of North India, the release said.
Aloke Lohia, Group CEO and Founder of IVL said, “This joint venture will allow us to gain the highest benefits by covering a larger geographical area of the fast-growing India market with a complementary and experienced partner. India has a well-educated and booming middle class that will embrace the modern, hygienic lifestyle offered by PET packaging.”
C. K. Dhanuka, Chairman of Dhunseri said, “Dhunseri believes that coming years will bring opportunities for expansion in the Petrochem sector and this joint venture will bring scale benefits to all stakeholders. The Indian JV between both the organizations will benefit from IVL's global presence and technological leadership.” (SH)
Fibre2Fashion News Desk – India
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