Indorama to invest 570 mln baht to increase capacity of amorphous PET

01-Mar-07

To address higher demand from domestic and international markets, Thailand's Indorama Polymers Plc (IRP), plans to invest 570 million baht to increase production capacity of amorphous PET polymer to 180,000 tpa from 120,000 tpa. The investment will be made through IRP's subsidiary Asia PET Thailand, and will help boost company competitiveness and gain from economies of scale, upon completion in the middle of 2008. Of the total production volume from the increased capacity, 30% would be targeted towards existing clients in Thailand, 30% would be exported to the US, and the balance to Asia and Africa. Improvements were needed because the stronger baht had pushed down the firm's margin to 16% from 14%. As demand for PET in Thailand is expected to grow by 20% this year against a global growth rate of 10%, IRP has seized the opportunity for investment. Also, IRP's amorphous polymer capacity in Thailand is lower than that in the Indorama Group's production bases in other regions. Currently, IRP's capacity for the product totals 225,000 tpa in the United States and 200,000 tpa in Lithuania. IRP plans to increase its capacity in the US and Northern Europe by 600,000 tpa. A feasibility study is expected to be completed by this year. The project requires total investment of around US$200 million. Global demand for PET is estimated to touch 13 million tons, of which Indorama has a market share of 4.5%. Demand is projected to increase to 16 million tons in 2009 with Indorama's market share rising to 7%.