Indorama Ventures Public Company Limited (IVL), a global chemical producer, has completed the share purchase of 83,000,000 newly issued shares in Indo Rama Synthetics (India) Limited (IRSL), equaling to approximately 31.79 per cent of IRSL’s enlarged share capital at the price of Rs. 36 per share. IRSL is a fibre manufacturing facility located in Nagpur, India. IRSL’s Nagpur facility has a combined capacity of 605,000 tonne/ annum, consisting of polyester chips, fibres and filament yarns.
“IRSL 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,” IVL said in a statement.
Thailand-based 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 about 7.0 per cent per annum, with a population of 1.2 bn. “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 statement added.
The textile industry contributes 15 per cent of India’s exports and employs 4 per cent 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,” said IVL Group CEO Aloke Lohia.
“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,” Lohia added.