Thailand based Indorama Ventures Public Company Limited (IVL) completed the deal to acquire the purified terephtalic acid (PTA) industrial plant of Spanish petrochemical company CEPSA Chimie MontrÃ©al s.e.c in Montreal, Canada. With the acquisition of Cepsa's PTA plant, Indorama is set to become an integrated player in the North American PET market.
IVL had announced its intention to acquire 100 percent shareholding in the PTA business of CEPSA Chimie from Cepsa QuÃmica SA earlier on March 23, 2015 to focus on higher petrochemical growth, and has been concluded after securing regulatory approval from the competition authorities.
Cepsa QuÃmica SA is a wholly-owned affiliate of Cepsa, and IQ Chimie Inc., a subsidiary of Investissement QuÃ©bec. Cepsa's PTA business manufactures the raw material that is used to produce polyester. The 600,000 ton per annum PTA plant will provide Indorama Ventures with feedstock security to better serve its customers and an enhanced leadership position in North America, IVL said.
With a turnover of $7.5bn a year, polyester producer Indorama consumes around 1.1 million tonnes of PTA annually in North America.
Aloke Lohia, Group CEO of IVL said that he heartily welcome their new colleagues at the Montreal PTA facility who complement their more than 14,000 employees worldwide. With the integration of the Canadian PTA facility, they now have all their global businesses present in North America.
This unique position is a win-win since they can now serve their customers more reliably and simultaneously to create accretive returns for their shareholders.
Vertical integration into feedstocks has always been an important part of IVLâ€™s global business strategy and now it has finally completed the loop in its North American value chain.
The PTA business in North America is robust and the timing of this acquisition comes with firmer margins and potentially firmer operating rates pending results of anti-dumping investigations on imported PET into USA.
North America is a large and attractive market where the IVL business has expanded considerably over the years since its first entry in 2003.
With multiple production assets in USA, Mexico and Canada, the company has become a leading player across PET, fibres and high value added products serving the safety and hygiene segments in North America.
Cepsa is an energy group fully owned by the International Petroleum Investment Company (IPIC) and employs more than 10,000 people and operates at every stage of the hydrocarbon value chain. It is engaged in petroleum and natural gas prospecting and production activities, refining, transport and sale of crude oil and natural gas derivatives, biofuels, co-generation and electricity sales.
Cepsa has developed a world-class chemicals division that is tightly integrated with its oil refining segment, where feedstock is manufactured and sold for the production of components with high value-addition.
It has a prominent position in Spain and, through the continuing international expansion of its business; it also operates in 15 countries, marketing its products all over the world. Following the sale, the company will focus on its phenol, acetone and LAB / LABSA businesses, located in Spain, Canada, Brazil, China, and Indonesia.
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