IVL rides M&A route to growth

Indorama Ventures (IVL) expects its sales to grow by 25 per cent to Bt240 billion in 2012 thanks mainly to mergers and acquisitions (M&A) this year. 

The company’s sales target so far has not included a big M&A deal of about Bt6 billion that IVL expects to conclude in the current quarter. The targeted firm has sales revenue of Bt12 billion per year, group chief executive officer Aloke Lohia said. 

He said half of the expected revenue would come from the United States and Europe, and the other half from Asia. The company anticipates limited impact from the weak economy in Europe as the products it makes – polyethylene terephthalate (PET) and purified terephthalic acid (PTA) – are the raw materials for plastic bottles and polyester for cloth, respectively, which are essential consumer goods. 

IVL expects to earn revenue of Bt240 billion in 2012, up from Bt190 billion this year. The company’s revenue in the first nine months of this year was Bt142 billion. It generated revenue of Bt100 billion in 2010. 

Lohia said the company was optimistic of finalising the Bt6-billion M&A deal this quarter. This company has businesses in the United States, Europe and Asia. 

“This company will not be the last M&A deal for this year. We expect a number of deals,” he said. 

Lohia added that IVL’s sales in the current fourth quarter would be lower than in the third quarter because fo the impact from flooding in Thailand. IVL’s PTA plant in Lop Buri, which contributes 5 per cent of its total revenue, is inundated. It expects to resume operations in the first quarter of 2012. 

IVL is having to import PTA from other plants such as those in Rayong, Indonesia and China to make up for the loss of output from Lop Buri. The Lop Buri plant generates revenue of Bt7 billion per year. The plant could not generate revenue for IVL during the second half of this year.