Indorama, Dhunseri joint venture PET resins in India

Indorama, Dhunseri joint venture for PET resins in India

5:10 AM, 1st March 2016
Indorama, Dhunseri joint venture for PET resins in India

BANGKOK, THAILAND: Indorama Ventures Public Company Limited (IVL) in Thailand said that it will form an equal joint venture with Dhunseri Petrochem Ltd (Dhunseri) in India, to manufacture and sell polyethylene terephthalate (PET) resins for Indian domestic markets and exports.

Dhunseri will purchase a 50 percent stake in the 216,000 tonne Micro Polypet Pvt Ltd (MicroPet), a company owned by Indorama Ventures in the North Indian State, Haryana. IVL in turn will acquire a 50 percent stake in a carved out entity, called Haldia, of Dhunseri, with an effective capacity of 480,000 tonne PET manufacturing located in the eastern state of West Bengal. The JV is expected to complete in H2 2016.

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 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.

The 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. IVL’s global market reach and high utilization 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.

“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,” said Aloke Lohia, CEO and founder, IVL.

“Dhunseri believes that coming years will bring opportunities for expansion in the Petrochem sector and this joint venture will bring scale benefits to all stakeholders.  The Indian JV between both the organizations will benefit from IVL’s global presence and technological leadership,” said C K Dhanuka, chairman, Dhunseri.

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