KPMG and HSBC advise Indorama Ventures on Brazilian PET purchase

Indorama Ventures has acquired Brazil’s largest Polyethylene terephthalate plant. The Thai based multinational chemical producer acquired the plant to aid its global client base and service the growing domestic market for PET plastics.

The acquisition of the Polyethylene terephthalate (PET) plant in Brazil’s northern coastal town of Ipojuca will be aided by both HSBC and KPMG. HSBC will act as a financial advisor during the transition process, while KPMG is serving as finance and tax due diligence advisor. The process will be completed by the second quarter of 2018.

Indorama Ventures is one of the worlds largest petrochemicals producers, with a global manufacturing footprint across Africa, Asia, Europe and North America. The expansion into Brazil is in line with the company’s strategy to extend its market position within the region. The country is well positioned to serve Indorama Ventures' global client base as well as create a greater regional presence. 

The plant itself is fully operational and is located within one of Brazil’s regional manufacturing hotspots. Formally owned by M&G Polimeros Brazil the facility has the capacity to produce 550,000 tonnes per annum and is the largest in Brazil. The plant is located in strategic proximity to a Purified Terephthalic Acid manufacturer (a key feedstock to PET), and Indorama is looking to increase productivity through further integration. 

Locally, South America is an emerging market and the demand for PET products is rising by as much as 5% in some countries. In comparison to similar markets around the world, the per capita consumption of PET products is relatively low. Sitting at 2.8kgs annually, there is substantial room for expansion into the domestic marketplace as well as increasing production for their global network. This market shift is seen by the company as a move which is supported by government policies to stimulate growth.

Aloke Lohia, Group CEO of Indorama Ventures, commented on the acquisition: “We are pleased to have reached this agreement, and taken significant action to strengthen our capability for profitable growth. Indorama Ventures now has unrivalled scale and global reach, being present in five continents with a uniquely balanced and integrated business model.”  

“This is an exciting move for us, reflecting our continued commitment to support our customers using our global scale and local presence. We look forward to capitalizing on this new market and opportunities for cross-selling to immediately deliver greater value to existing and new customers, while delivering profitable growth and enhanced shareholder value,” he said.