Thailand’s Indorama Ventures Public Company Limited (IVL) and India’s Dhunseri Petrochem Ltd. (Dhunseri) have agreed to enter into an equal joint venture to manufacture and sell PET resins for Indian domestic markets and for exports. Dhunseri will purchase a 50% stake in the 216,000 tonne Micro Polypet Pvt. Ltd. (MicroPet), a company owned by Indorama Ventures in the North Indian State, Haryana. IVL in turn will acquire a 50% stake in a carved out entity, called Haldia, of Dhunseri, with an effective capacity of 480,000 tonnes PET manufacturing located in the eastern state of West Bengal. The JV is subject to regulatory approvals and expected to complete in H2 2016.
PET usage per head is just 0.6 KG per annum in India compared to 2.6 KG per annum in China and 10.9 KG per annum in USA. This joint venture is a win-win for both producers with 700,000 tonne/annum of combined capacity in the strongest growth market having a population in excess of a billion people, as well as having favorable trade agreements with logistically advantaged countries in the region. The joint venture will gain significant synergy benefits being the sole producer of PET Resin in North and East India and with both sites being effectively integrated with third party PTA suppliers, which will bring savings in SG&A and procurement. IVL’s global market reach and high utilization rates are expected to supplement Haldia’s location benefit at Eastern India’s largest port while MicroPet enjoys a strong location advantage in the high-demand territory of North India.
Mr. Aloke Lohia, Group CEO and Founder of IVL said, “This joint venture will allow us to gain the highest benefits by covering a larger geographical area of the fast-growing India market with a complementary and experienced partner. India has a well-educated and booming middle class that will embrace the modern, hygienic lifestyle offered by PET packaging.”
Mr. C. K. Dhanuka, Chairman of Dhunseri said, “Dhunseri believes that coming years will bring opportunities for expansion in the Petrochem sector and this joint venture will bring scale benefits to all stakeholders. The Indian JV between both the organizations will benefit from IVL’s global presence and technological leadership.”
