 "Indorama Ventures' PET business")
Dhunseri Petrochem Ltd, the petrochemicals division of Dhunseri Petrochem & Tea Limited, has entered into an agreement with Thailand’s Indorama Ventures Public Company Limited (IVL) to form a 50:50 joint venture to manufacture and sell polyethylene terephthalate (PET) resins for Indian domestic markets and for exports. Dhunseri will purchase a 50% 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 percent stake in a carved out entity, called Haldia, of Dhunseri, with an effective capacity of 4,80,000 tonnes PET manufacturing located in the eastern state of West Bengal. The JV is subject to regulatory approvals and expected to complete in H2 2016.
“Dhunseri believes that coming years will bring opportunities for expansion in the petrochemical sector and this joint venture will bring scale benefits to all stakeholders. The Indian JV between both the organisations will benefit from IVL’s global presence and technological leadership,” said C K Dhanuka, chairman of Dhunseri.
PET usage per head is just 0.6 kg per annum in India compared to 2.6 kg per 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 favourable trade agreements with logistically advantaged countries in the region.
Dhunseri-IVL 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. Indorama Ventures’ global market reach and high utilisation 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.
Aloke Lohia, group CEO and founder of Indorama Ventures, 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.”
Dhunseri Petrochem Ltd is one of the largest producers of PET resin in India and among the top ten in the world. The company manufactures bottle grade PET resin for packaging of drinking water, carbonated soft drinks, edible oil, pharmaceuticals, etc.
Indorama Ventures Public Company Limited has a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company’s portfolio is comprises high value-added (HVA) categories of polymers, fibres, and packaging, selectively integrated with self-manufactured ethylene oxide/glycols and PTA where economical. IVL products serve major brand-owners and FMCG companies in consumer products and niche applications, such as beverages, hygiene, personal care and safety segments. IVL has about 14,000 employees worldwide and consolidated revenue of $ 7 billion in 2015.
