BANGKOK, Thailand — June 1, 2017 — Indorama Ventures Plc Co. Ltd. (IVL), a global chemical producer, has announced that the deal to acquire the Glanzstoff Group tire cord and single-end cord business has been concluded and will add to the company’s portfolio of choice auto sector solutions. Glanzstoff is Europe’s largest manufacturer of both tire cord fabrics and single-end cords, projecting IVL into a strong position for further growth with its extant pre-eminence in the rayon, aramids, nylon 6,6 and polyester businesses within the auto segment.
Indorama Ventures entered into the tire cord business in 2014 with the acquisition of Germany-based PHP Fibers. The company also owns one of the most prominent polyester tire fabric businesses in China, Performance Fibers. Work commenced at the beginning of 2017 to expand the Performance Fibers manufacturing line due to increased demand from China’s improving economy. Glanzstoff is also currently implementing a single end cord project in China that will commence production in Q4, 2017.
Aloke Lohia, Group CEO of Indorama Ventures said: “This is an outstanding asset in our portfolio and one we have acquired as part of our long-standing ambition to establish a solid foothold in the European auto sector, especially in relation to the tire business. Over the past five years, IVL has invested substantially into creating a diversified earnings stream via its High Value-added (HVA) portfolio. Diversification into HVA, which now accounts for 50% of the Company’s core EBITDA, has allowed us to deliver robust earnings on a sustained basis. In order to ensure sharp focus, the business is further segmented into high-growth industry verticals, including Automotive and Hygiene, and is driven by investments in intellectual property and innovations.”
“The key,” Lohia added, “is the focus on our core areas of strength and a willingness to invest and then reinvest to take advantage of our global resources. The Glanzstoff acquisition takes us from polyester and nylon 6,6 into rayon but that is still not far removed from our current portfolio as it will enhance our product offering to major customers. In a few short years, the HVA segment has skyrocketed and now delivers revenues of around $ 3 billion and serves segments that individually grow at around 7 percent year-on-year.
“The automotive segment is a key investment driver for IVL within its rapidly-expanding HVA portfolio. IVL is at the forefront of developing new solutions, providing a unique global manufacturing footprint, an unparalleled product portfolio together with sustainable solutions making it the number one fiber partner for the automotive industry. The Glanzstoff acquisition provides a strategic fit to the automotive segment in the HVA portfolio. Geographically, we will enter Luxembourg, Italy and the Czech Republic, providing us the convenience of production bases nearby our major customers. As a world-class chemical company we expect to continue providing high growth and sustainable returns for our shareholders,” Lohia concluded.
Posted June 1, 2017
Source: Indorama Ventures Public Company Limited (IVL)