Thailand’s largest polyester producer, Indorama Ventures Public Company Limited (IVL), released its third quarter 2012 results. EBITDA rose to $122 million compared to $105 million in the second quarter and net profit rose to $50 million from $39 million. While sales of $1.7 billion were on par with the third quarter in 2011, they slumped a bit compared to the second quarter of 2012. Although results improved quarter on quarter, year-on-year results were weaker than the third quarter of 2011 reflecting poor conditions in Asia and Europe at present the company says.

Though the positive quarter-on-quarter results were a reminder of its strength as a global player IVL says it still saw weak margins in Asia led by concerns about the Chinese economy, which remained depressed over several quarters, and poor margins for Asian PTA caused by overcapacity. Contrasting with this, the MEG, PET and Polyester businesses in North America performed while European businesses were slightly weaker due to the prolonged economic crisis. North America represents around 40% of IVL’s $5.1 billion in consolidated sales for the nine months ending Q3 2012.

“IVL has continued to move forward with our business plans. We expect the industry to start picking up again in 2013 and we want to remain a highly competitive and a low-cost leader, focused on returns for our shareholders,” says Aloke Lohia, Group CEO of Indorama Ventures. “We have acquired businesses over the past few years that have helped us to consolidate the industry and improve the quality of our earnings. Our management is focused on allocating capital expenditure only on very high return opportunities where we can create attractive returns across cycles.”

The company has approved several such projects including a brown-field PET plant in North America with an annual capacity of 540,000 tons for startup in 2015. The European arm of IVL will in Q4 2012 startup its 200,000 tons per annum PET plant at Rotterdam followed by a PTA de-bottleneck to 600,000 tons per annum at the same site by 2015. The company will also de-bottleneck its Polish site to take advantage of this growth market and its virtual integration with third party PTA. On the polyester fiber front, IVL’s plant with annual capacity of 300,000 tons is due to startup in 2013 in Indonesia, the highest growth region in ASEAN.

IVL has also made several acquisitions to facilitate growth. It acquired 75% of the polyester staple fiber and specialty filament business of Trevira GmbH having operations in German and Poland. The remaining 25% is held by Sinterama S.p.A. of Italy. The JV company is now called Trevira Holdings GmbH. The acquisition of Trevira allows the entry of IVL into the branded specialist filament business. Trevira is a fully integrated polyester fiber company with a capacity of 120,000 tons per year of staple fiber and filament yarn. It is the market leader in Europe in high value applications of polyester, especially in automotive and home textiles.

IVL also recently agreed to acquire 100% of FiberVisions Holdings LLC, which enhances its position in the specialized fibers business for hygiene products and other growing fiber applications. As the largest producer of polypropylene fiber, FiberVisions complements its strength as the world’s largest polyester producer.
 
IVL is the world’s leading producer in the polyester value chain, with a global footprint and manufacturing across Africa, Asia, Europe and North America. Its products serve major players in consumer staples. The company’s main products are PTA, PET, Polyester fibers and yarns and Ethylene Oxide/Glycols, which are distributed across the world.