Reliance to buy German firm Trevira for Rs 443cr

Deal to make Reliance world's largest polyester fibre and yarn player.

Reliance Industries is set to acquire German polyester company Trevira for €80 million (about Rs 443 crore at the current conversion rate), Chairman and Managing Director Mukesh Ambani told shareholders at the company's annual general meeting here yesterday.

Ambani also announced a plan to add 1 million tonnes of polyester capacity over the next two years. After the completion of the Trevira deal and the expansion, Reliance's capacity for producing polyester fibre and yarn would exceed 1.8 million tonnes, making it the largest player in the world, Ambani said. Reliance now has an installed capacity of 1.1 million tonnes and Trevira 130,000 tonnes.

"I am delighted to announce that Reliance has finalised the acquisition of Trevira GmbH, an erstwhile division of German giant Hoechst AG, a leading polyester producer and a well-known brand in Europe," Ambani said.

The deal marks the second overseas acquisition in the last few months by India's largest industrial house. In January this year Reliance Infocomm acquired US-based FLAG Telecom for $311 million. The Trevira acquisition not only gives Reliance an entry into Europe but also a chance to capture the Eastern European market.

The Trevira deal comes a year before the World Trade Organisation dismantles textile trade quotas, which is expected to open up new markets for the world textile industry.

Big plans in the pipeline

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• Reliance announces acquisition of Frankfurt-based Trevira GmbH, an erstwhile division of the German giant Hoechst AG, and gas find off the Orissa coast

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• Reliance sets out plan to add an additional half-a-million tonnes per annum of polyester capacity over the next two years

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• The Trevira acquisition and capacity expansion to raise Reliance's capacity to 1.8 million tonnes, making it the world's largest producer of polyester fibre and yarn

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• To invest Rs 2,500 crore in oil exploration over the next 2-3 years