A global chemical producer, Indorama Ventures Public Co Ltd. (IVL), has entered negotiations to acquire DuraFiber Technologies MÃ©xico Operations, S. A. DE C. V. (DFT), a Mexican producer of durable technical textiles for industrial, tire reinforcement, and specialty applications globally.
Aloke Lohia, Indorama Ventures group CEO, said that the acquisition of DuraFiber is strongly aligned with their strategy of pursuing accretive growth opportunities in the high value-added automotive segment.
DuraFiberâ€™s portfolio is a complementary fit with their current HVA tire cord fabric products in Europe and a strong fit with their existing PET site in Mexico. DuraFiber is a strong brand with recognized products with deep insights into the market combined with IVLâ€™s global scale will enable them to better meet customersâ€™ evolving needs.
The automotive segment is a key growth driver in IVLâ€™s HVA portfolio that will bring exciting developments to the Company. While PET is still an important backbone for the Company, HVA is now accounting for 50% of IVLâ€™s core EBITDA. Their focus remains on delivering best-in-class propositions, while driving our global innovation agenda to strengthen the Companyâ€™s capabilities in the value chain where they are present. They are confident that with the transformational strategy to consolidate their leadership position in key businesses and markets, IVL delivers significant value to their shareholders, concluded Mr Lohia.
DFTâ€™s Queretaro plant in Mexico (co-sited with IVL Mexico) has a capacity to produce a total of 37,500 tonnes/annum of PET High Modulus Low Shrinkage (PET HMLS), PET Heavy Denier Industrial (PET HDI) and nylon 6 fully-integrated into tire cord fabrics and industrial and industrial textiles.
Its products are used in a wide range of applications including reinforcement for conveyor belts, hoses, single-ply roofing, tents, automotive airbags, seat belts, safety harnesses and ropes.
The transaction is expected to be completed in the third quarter of 2017, subject to the usual regulatory approvals (including the approval by the Mexican Antitrust Commission). Concurrently with this planned acquisition in Mexico, IVL has agreed to also acquire DuraFiber Longlaville, France, having a capacity of 35,000 tonnes/annum, which will be subject to a definitive agreement, relevant regulatory approvals and employee approval.
The market is projected to have a growth rate around 6% CAGR in 2017-2021. DuraFiber is the sole domestic tire cord fabric producer in Mexico with products approved by major global tire companies.
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