 "Image courtesy: Zylog Plastalloys")
LyondellBasell, one of the world's largest plastics, chemical and refining companies, has made its second purchase in India with the acquisition of the polypropylene (PP) compounding assets of the Pune-based Zylog Plastalloys Pvt Ltd. With this acquisition, LyondellBasell will double its automotive customer base in India and become the third largest producer of polypropylene compounds in the country with an annual capacity of 44,000 metric tonnes. The transaction is expected to close in early 2016.
Bhavesh (Bob) Patel, CEO and chairman of the management board of LyondellBasell, said, “We are very optimistic about India's economic growth and rapidly expanding automotive market. The acquisition of SJS and Zylog are part of our plan to strategically expand our footprint where it makes sense from an economic and strategic perspective. With these investments, LyondellBasell will be a leading producer of PP compounds in all major automotive growth regions of the world.”
Earlier this year, LyondellBasell acquired SJS Plastiblends, a manufacturer of polypropylene compounds located in Aurangabad (Maharashtra). The Zylog acquisition includes manufacturing sites in Sinnar (Maharashtra) and Chennai (Tamil Nadu) and brands of Hipolyene, Hiflex & Entek.
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"With this acquisition, LyondellBasell would have the opportunity to expand its footprint in Indian automotive sector, getting immediate access to all major automotive OEs and leading tier I customers, that Zylog has been servicing over the years," said Aschak Damani, executive director, Zylog Plastalloys.
LyondellBasell is the world's largest producer of polypropylene compounds with an annual capacity of 1.2 million metric tons (2.6 billion pounds). These compounds are used to manufacture automotive parts, home appliances and other products. LyondellBasell has supplied the Indian market through imports and tolling arrangements since 2009.
India represents the fourth largest growth market for automobiles globally with 3 million new vehicles produced each year. According to IHS Inc, India's automotive market is expected to continue growing by 6 to 8 percent annually through 2021. Additionally, the World Bank has predicted India's GDP to grow at a rate of 8 percent by 2017.
Zylog Plastalloys serves various segments of automotive industry with its broad range of polyolefin compounds, primarily based on polypropylene, ethylene propylene diene monomer (EPDM) rubber and styrene chemistries. Post-LyondellBasell deal, Zylog Plastalloys will continue to operate its elastomer business that includes Neoplast (TPV) and Neoflex (TPE) brands. Current promoters have strategic plans in place to expand this elastomer business with new technology and product portfolio to cover wider applications in medical, healthcare, poultry, irrigation, wire & cable, building & construction, appliances and of course automotive. “Besides this, Zylog Composites, a new start-up from the same group, is pushing new frontiers in thermoformed parts and components based on flexible and rigid TPOs, replacing rubber, PVC, ABS, HIPS focused to automotive applications,” said Zylog in a press release.
