Indorama Ventures to invest in new Thai recycling plant and high technology business in Thailand and Indonesia.Indorama Ventures Public Company Limited (IVL), the world’s leading vertically integrated Polyester Value Chain producer, will increase its investment into Thailand with a new recycling plant in Nakhon Pathom Province, near Bangkok, the current location of its subsidiary Indorama Polyester Industries’ Polyester Fibers and Yarns plant.
Under the new project, discarded, or “post consumer,” PET bottles will be collected and recycled to produce high quality resin for making containers for consumer drinks; yarns for premium garments of environmentally-conscious brands and colored fibers for automotive and non-woven end applications.
The new investment will be able to recycle 36,000 tonnes of bottles a year to make about 28,500 tons of recycled polyester. Wongpanich, Thailand's leading private waste recycler will deliver discarded PET bottles to the Nakhon Pathom facility for recycling. The project will be located in Nakhon Pathom Province in Thailand.
Mr. Aloke Lohia, Group CEO of Indorama Ventures, said, “While there are many companies working in recycled polyester, there are only a handful of manufacturers who are able to make the quality of recycled product suitable for premium applications, and there is unmet demand for recycled products.
Indorama Ventures has launched the ECORAMA brand for its recycled Polyester Fibres and Yarns products and has recently been awarded a Green Label certificate by the Thailand Environment Institute. The project is targeted to commence operations by the fourth quarter of 2012. Financially, we expect this project to be accretive to the bottom line.”
In order to further reduce the company’s carbon footprint, IVL will invest $6.7 million into a Gas Engine project in Indonesia.
“This is inline with our commitment to the environment. The power project will replace liquid fuels with cleaner natural gas that will reduce our carbon emissions by about 8,000 metric tons annually,” Lohia said. “Both projects are expected to lower the company’s impact on the environment, in line with our commitment to sustainability and recycling as core focus areas.”
Indorama Ventures expects to invest further into the Thai market with a Bi-component Fibers project for Hygiene Applications. The company is highly active in the non-woven materials market and has recently acquired bi-component fiber capacity in Europe through Trevira that is targeted at the hygiene sector. Hygiene products utilize high technology that requires top class manufacturing and close ties with customers to be able to provide the exacting specifications required for products that remain in close touch with the skin such as baby diapers, feminine hygiene, etc.
The new project will produce one of the key components of such applications by tying up technologically with Japan’s Toyobo, a well-known company in this field, to make bi-component fibers for hygiene end-use. This project will have a capacity of 16,000 tons per year and will be located in Rayong, on the Eastern Seaboard of Thailand. The project is expected to commence production by the second quarter of 2012.
Indorama Ventures will also invest in another strategic project to make 16,000 tons per year of high quality bi-component yarns, a speciality product in the fibers industry, at its recently acquired Indorama Ventures Indonesia (IVI) plant (formerly SK Keris) in Tangerang, Indonesia. IVI owns unique technology to make Bi-component yarns (known as FINNE) through a single step process.
The company enjoys significant competitive advantage over companies who currently use a two step process and has secured a leading market share in this segment.
Mr. Lohia noted: “Competition has not been able to match this product and there is unmet demand in the market. We have developed a new generation called FINNE (INOV) to enhance our lead over the competition due to its significant cost advantage and superior attributes. The product is a speciality line that is very popular for outerwear and has unique properties of drape and touch which few competitors can offer, giving it a good potential for growth.
The bi-component and FINNE projects will both offer Indorama Ventures a higher margin and therefore boost our revenues and earnings while securing the company against any volatility in raw material costs.
“We expect to commence operations in the first quarter of 2013, bringing our total new investments in Thailand and Indonesia to $85 million, which will provide further value-added specialities to our Aspiration 2014 growth plan.” Lohia said.
