Global chemical producer Indorama Ventures Public Company Limited (IVL) is further strengthening its automotive segment through its successful acquisition of DuraFiber Technologies México Operations, S. A. DE C. V. (DFT), a leading Mexican producer of durable technical textiles for industrial, tyre reinforcement, and specialty applications globally.
DFT’s Queretaro plant in Mexico (co-sited with IVL Mexico) has a capacity to produce a total of 37,500 tonnes per annum of PET High Modulus Low Shrinkage (PET HMLS), PET Heavy Denier Industrial (PET HDI) and Nylon 6 fully-integrated into tyre 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 per annum.
Commenting on the acquisition, Aloke Lohia, Group CEO of Indorama Ventures, said, “The acquisition of Dura Fiber is strongly aligned with our strategy of pursuing accretive growth opportunities in the high value-added automotive segment. Dura Fiber’s portfolio is a complementary fit with our current HVA tyre cord fabric products in Europe and a strong fit with our existing PET site in Mexico. Dura Fiber is a strong brand with recognised products with deep insights into the market combined with IVL’s global scale will enable us to better meet customers’ evolving needs.”
The market is projected to have a growth rate around 6% CAGR in 2017-2021. Dura Fiber is the sole domestic tyre cord fabric producer in Mexico with products approved by major global tyre companies.
The automotive segment is a key growth driver in IVL’s HVA portfolio, Lohia said.
“While PET is still an important backbone for the company, HVA is now accounting for 50% of IVL’s core EBITDA. Our focus remains on delivering best-in-class propositions, while driving our global innovation agenda to strengthen the company’s capabilities in the value chain where we are present. I am confident that with the transformational strategy to consolidate our leadership position in key businesses and markets, IVL delivers significant value to our shareholders,” Lohia concluded.