Indorama Ventures to Acquire Kordแrna from Jet Investment

General Press Releases Friday June 29, 2018 11:14
Bangkok--29 Jun--Indorama Ventures
Accelerates Growth in High Value Automotive Business Becomes the #1 Tire Cord Producer in Europe
  • Consolidates IVL's position as the major player in the tire cord industry and supports customer needs with integrated supply chain from feedstock to fabrics
  • Geographical benefits from strategic assets located in the heart of Europe's automotive supply chain
  • Enhances IVL's capabilities in HVA sector and provides the Company with a solid platform for continued growth

Indorama Ventures Public Company Limited (IVL), a global chemical producer, announced that it has entered into an agreement with Jet Investment, a.s., to acquire Kordárna Plus a.s., the largest producer of tire cord fabrics in Europe. The Kordárna acquisition includes one production site in the Czech Republic and one in Slovakia, with a combined tire cord and technical fabrics production capacity of 57,000 tonnes per annum (tpa). The company employs 786 employees. The transaction is expected to be completed during the second half of 2018, subject to regulatory approvals.

Founded in 1948, Kordárna is a leading European manufacturer specializing in cord fabrics for the rubber industry and industrial fabrics for conveyor belts. Tire Cord Fabrics (TCF) represent about 75% of Kordárna's sales. Kordárna has a broad customer base and long-established relationship with major global tire companies. Its products are supplied to customers in more than 15 countries in Europe, North America, South America and Asia.

Both Kordárna sites are strategically located in the European Tire Industry Hub, where major tire and car manufacturers are located with approximately 3.7 million cars produced within a 500km radius, providing Indorama Ventures an optimal location for supplying TCF to meet growing customer demand.

Indorama Ventures will integrate Kordárna within its exisiting operations in Europe, offering synergies from backward integration into Polyester feedstocks and increased production flexibility. Post acquisition, IVL will have 12 manufacturing sites for Automotive fibers globally with 127,000 tpa capacity.

The Automotive segment is one of the key growth drivers in IVL's high value-added (HVA) portfolio, which continues to see impressive growth at 43% CAGR with an estimated proforma revenue of $1 billion in 2019 when consolidating Kordárna. Kordárna will provide IVL with a complete portfolio of tire cord fabrics, including Polyester, Nylon 66, Nylon 6, Rayon, Aramid and Hybrids. Post acquisition, Indorama Ventures becomes the number one tire cord producer in Europe and the second largest for tire cords globally, with a full range of tire cord fabrics and single end cords.

Commenting on the acquisition, Mr. Aloke Lohia, Group CEO of Indorama Ventures said, "The acquisition of Kordárna is consistent with our proven HVA strategy for growth through accretive acquisitions. Kordárna is one of the most recognized and trusted brands in the tire industry and has huge potential together with our PHP, Performance Fibers and Glanzstoff businesses to jointly create value for the customers and our stakeholders. By combining our proven capabilities and scale with Kordárna's long-standing customer relationships, we will create powerful opportunities to sustainably grow with our first billion dollar vertical in HVA.

The automotive industry is one of the key areas of business growth for IVL. The emerging trend of mobility is underpinning this growth, driven by a growth led by light weighting of cars and tires; fuel efficiency and safety.

These opportunities will drive forward IVL's strategic growth as the leading fiber partner for the automotive industry, enabling us to deliver best-in-market services to our customers."

Commenting on the divestment, Mr. Igor Fait, Managing Partner in Jet Investment, said, "The selling of Kordárna to a strategic industrial player is a logical accomplishment of a successful turnaround project on our side. Since we entered Kordárna in 2010, the company has strengthened its position in all aspects of the business and grown internally to be a leading tire cord producer in Europe."

Mr. Marek Malík, Partner in Jet Investment, said, "Kordárna has made headway in the past eight years to a successful, respected international producer of tire cords and technical textiles. We believe Kordárna will further leverage its position in the market, as it becomes an integral part of horizontally and vertically integrated businesses across various regions under Indorama Ventures petrochemical business."


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