Indorama Ventures (IVL), a leading petrochemical producer, has reached a definitive agreement to acquire one of the leading automotive fibre businesses, Performance Fibers Asia, including all its Asian manufacturing operations and the right to continue using the name Performance Fibers.

Performance Fibers Asia is the premier producer of tire fabrics in the region and is the second largest production facility of its kind in China.

Asia is the largest and fastest-growing market for tires globally, accounting for more than 50% of global tire demand in 2013 and expanding at 8% CAGR over the last five years.

Automotive safety applications

This acquisition represents the company’s efforts to increase and strengthen its presence in the high value-added (HVA) automotive safety applications.

Performance Fibers Asia brings together a broad and complementary portfolio of innovative products to the company, following the acquisition of PHP Fibers and Trevira in the last two years. The combined three businesses are expected to have annual revenue of at least US$ 850 million.

The Performance Fibers business in Europe and the Americas will continue to operate separately under the ownership of Sun Capital Partners, a leading private investment firm, and the leadership of the existing management team in those regions.

Strategic step

“This acquisition is a great strategic fit for IVL. We are acquiring a company that has an established premier position in the life-critical end-use applications in the tire industry across the world. The company has a proven management team with a track record of value creation, expanding the business at 17% CAGR over the last four years,” said Aloke Lohia, Indorama Ventures Vice Chairman and Group CEO.

“Our specialty polymers, fire retardant yarns, and airbag yarns businesses together with Performance Fiber Asia’s tire fabrics will create scale as well as operational and technical leverage to firmly place Indorama Ventures amongst the leading brands in automotive safety applications worldwide.”

“With the continued growth of China, India and all emerging nations, the industry growth outlook for tires remains very attractive especially as radial tires’ importance is increasing for fuel efficiency and passenger comfort.”

Indorama Ventures

Indorama Ventures is a leading petrochemicals producer, with a global manufacturing footprint across Africa, Asia, Europe and North America.

The company’s portfolio is comprised of necessities and High Value-Added (HVA) categories of polymers, fibres, and packaging, and is based on selectively self-manufactured ethylene oxide/glycols and PTA, where economical. Its products serve major players in consumer products, such as beverages, hygiene, personal care and safety segments.

www.indorama.net