IRP to become leading global polyester manufacturer with acquisition of Tuntex

29-Jan-08

Indorama Thailand (IRP) is anticipated to attain a global market leadership position in the polyester business with the acquisition of Tuntex, Thailand's largest polyester manufacturer. Acquisition of Tuntex will increase IRP's production capacity giving it control of 40% of the local polyester market. IRP has invested over Bt2 billion on the deal and on production improvements at Tuntex's plants which are expected to be complete by April. Of the investment, 50% willl come from equity and the rest from financing. IRP will hold 90% of Tuntex (Thailand) and will by default have a minority interest of about 15% in Tuntex Petrochemicals, the country's first PTA producer. With the conclusion of this deal, IRP's total investment in the Kingdom has risen to Bt22 billion. A memorandum of understanding (MOU) has been signed with Tuntex to acquire its business as a part of a strategy to expand the scale of IRP's production and to integrate the production of purified terephthalic acid (PTA), polyester and polyethylene terephthalate (PET). The deal will also create sustainable competitive advantages. The acquisition would make a strategic fit with Indo Poly, an IRP subsidiary with an existing polyester plant in Nakhon Pathom province. Indo Poly's production capacity is 100,000 tpa of polyester. IRP's manufacturing base for polyester and PTA is Thailand, while its US and European plants focus on PET. The company is exploring business opportunities in Brazil, Russia, India and China. Currently, IRP has three business units dealing with the production of PTA, polyester and PET. It has seven manufacturing plants in Saraburi, Lop Buri, Nakhon Pathom, Rayong and Bangkok.