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3rd April 2019, Bangkok

IVL acquires strategic stake in IRSL in India

IRSL is India’s largest dedicated polyester manufacturer. © IVL

IRSL is India’s largest dedicated polyester manufacturer. © IVL

Indorama Ventures (IVL), a global chemical producer, has completed the share purchase of 83,000,000 newly issued shares in Indo Rama Synthetics (India) Limited (IRSL), equalling to around 31.79% of IRSL’s enlarged share capital at the price of INR 36 per share.

IRSL is India’s largest dedicated polyester manufacturer with an Integrated manufacturing complex in Butibori, near Nagpur, in Maharashtra, with production capacity of 605,000 tonnes per annum of polyester staple fibre, filament yarn, draw texturised yarn, fully drawn yarn and textile grade chips.

The company is a strong strategic fit with IVL’s fibre strategy in home and apparel, where the company focuses on building a low-cost position in Asian operations and leveraging innovation in high-margin growth markets. “This strategic investment provides IVL entry into a large domestic market, where local presence gives duty and logistic benefits,” the manufacturer explains.

IVL has already invested in India over three years in the PET business. India is the second largest polyester market in the world after China, with consumption growing at around 7% per annum, with a population of 1.2 billion.

India’s per capita consumption of polyester is about 3 kg, compared to 14 kg in China. This low-level per capita consumption is expected to increase along with the rise in India’s per capita GDP, which will provide affluence-related consumption and opportunities for growing into more functional and High Value-added (HVA) products. “IVL is in a strong position to benefit from this evolving trend, backed by its strong R&D capabilities,” the company reports.

The textiles industry contributes 15% of India’s exports and employs 4% of the population and therefore has an important part in India’s industrial policy.

“This strategic investment is another step in executing our strategies to position IVL for sustainable growth. India has been on our radar for some time. It is the only large domestic market for fibres where we are not present. The market for fibre in India is expected to grow exponentially and is still largely untapped,” commented Aloke Lohia, Group CEO of IVL.

“India is the largest textile market and IRSL has a key position. The strategic investment is expected to grow shareholder returns. This market has a large, untapped potential that will be highly lucrative as it expands.”

“As a company listed in the Dow Jones Sustainability Index, we put the circular economy and sustainability as a priority. We will bring our knowledge and expertise of recycling to play a role in the creation of awareness and practices thus protect the environment and society.”

The Indo Rama Group has a strong presence in Indonesia, Thailand, USA, Nepal and Sri Lanka, besides India. It has focused business activities in the field of textiles, polyesters, and industrial chemicals.


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