Indorama Ventures Public Co. Ltd. (IVL; Bangkok, Thailand; www.indoramaventures.com) announced that it has entered into a joint venture agreement with Dhunseri Petrochem Ltd. (Dhunseri) to acquire its Egyptian Indian Polyester Company S.A.E. (EIPET) Polyethylene Terephthalate (PET) facility located in Ain Sokhna free-trade zone, North West of the Gulf of Suez in Egypt. This plant has a manufacturing capacity of 540,000 metric tons per year (m.t./yr). The transaction takes place with immediate effect. Restart activities for manufacturing recyclable PET has commenced and key raw material Purified Terephthalic Acid (PTA) will be shipped from IVL Portugal soon after restart of Portugal PTA production anticipated in early July 2018.
This joint venture between Dhunseri and IVL allows for an uninterrupted supply of recyclable PET, which promotes the development of the consumer beverage industry and increases demand for sustainable packaging. IVL is focused on balancing market needs for recyclable PET packaging, which has faced unprecedented economic challenges over last several years leading to uncompetitive supplies and disruptions in recent times. The facility in Egypt will lead to easing supply concerns in North Africa and in the Common Market for Eastern and Southern Africa (COMESA) as well as the markets covered by the several Free Trade Agreements (FTA) which Egypt is a signatory to.
The EIPET plant is strategically located in Ain Sokhna free trade zone, Egypt, offering logistics advantage when sourcing feedstocks and delivering end products in key markets, domestically and internationally. This facility is one of the largest in the Middle East and Africa and is well-positioned to cater to the increasing packaging needs of customers in the region and elsewhere. The economic resurgence in the region is expected to further improve demand growth potential, which currently is at around 7% per annum. Both partners are confident about the reforms that President El-Sisi has brought about in Egypt and the JV is a step forward to fulfilling the commitment made to the Egyptian authorities over the past three years.
The addition of EIPET will increase Indorama Ventures’ existing global PET capacity by 10%. This plant uses the same technology as deployed at the IVL Dhunseri facility in India, allowing the company to leverage its proven operational expertise and track record of successful integration.
Commenting on this joint venture, Mr. Aloke Lohia, Group CEO of Indorama Ventures said, “I am delighted to extend our strategic partnership with Dhunseri through this acquisition. EIPET is a good fit with Indorama Ventures’ strategy in the recyclable and sustainable PET business, where the Company aims to supplement its position and build scale in key markets. EIPET also marks Indorama Ventures’ maiden entry into Egypt, complementing our existing footprint in EMEA. EIPET will provide meaningful opportunities for feedstock integration from our existing assets while allowing us to serve our customers in growth markets of Egypt and in the region.”
Mr. C. K. Dhanuka, Executive Chairman of Dhunseri said, that “Our JV in India has been extremely smooth and provided a win-win situation for both, the customer and us. After experiencing the JV in India, we are very upbeat on entering the same in Egypt, which will be again a equal ownership JV.”