Indorama to acquire Czech tyre cord maker

July 2, 2018

tireThailand-headquartered chemical maker Indorama Ventures Public Company Limited (IVL) has entered into an agreement to acquire Kordárna Plus a.s., the largest producer of tire cord fabrics in Europe. The Kordárna acquisition includes one production site in the Czech Republic and one in Slovakia, with a combined tyre cord and technical fabrics production capacity of 50,000 tonnes/year. The company employs 786 employees. The transaction is expected to be completed during the second half of 2018, subject to regulatory approvals.

Kordárna has been owned by Jet Investment since 2010. Founded in 1948, Kordárna specialises in cord fabrics for the rubber industry and industrial fabrics for conveyor belts. Tyre Cord Fabrics (TCF) represent about 75% of Kordárna’s sales. Kordárna has a broad customer base and long-established relationship with major global tyre companies. Its products are supplied to customers in more than 15 countries in Europe, North America, South America and Asia.

Both Kordárna sites are strategically located in the European tyre industry hub, where major tyre and car manufacturers are located with approximately 3.7 million cars produced within a 500 km radius, providing Indorama with what it says is an optimal location for supplying TCF to meet growing customer demand.

Indorama will integrate Kordárna within its existing operations in Europe, offering synergies from backward integration into polyester feedstocks and increased production flexibility.

Post acquisition, IVL will have 12 manufacturing sites for automotive fibres globally with 127,000 tonnes/year capacity.

The automotive segment is one of the key growth drivers in IVL’s high value-added (HVA) portfolio, which continues to see impressive growth at 43% CAGR with an estimated proforma revenue of US$1 billion in 2019 when consolidating Kordárna. The latter will provide IVL with a complete portfolio of tyre cord fabrics, including polyester, nylon 66, nylon 6, rayon, aramid and hybrids.

Post acquisition, Indorama will become the number one tyre cord producer in Europe and the second largest for tyre cords globally, with a full range of tyre cord fabrics and single end cords.

The automotive industry is one of the key areas of business growth for IVL. The emerging trend of mobility is underpinning this growth, driven by a growth led by light weighting of cars and tyres; fuel efficiency and safety.

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