By: Michael Lauzon
October 29, 2012
NEW DELHI (Updated Oct. 29, 1:15 p.m. ET) — An Indian company has agreed to buy ExxonMobil Chemical Co.’s global biaxially oriented polypropylene films operations, which comprise one of the world’s largest BOPP film manufacturers.
New Delhi-based Jindal Poly Films Ltd. said it signed the deal on Oct. 26, but it did not release terms. The company announced the acquisition to the Bombay Stock Exchange.
ExxonMobil has a leading position in BOPP films in both North America and Europe. Plants included in the deal are in Shawnee, Okla., LaGrange, Ga., Virton, Belgium, Brindisi, Italy, and Kerkrade, Netherlands. A BOPP plant in Belleville, Ontario, is not included in the agreement and will be closed in the first half of 2013, ExxonMobil spokeswoman Margaret Ross said in a telephone interview from ExxonMobil’s head office in Houston.
Belleville is ExxonMobil’s highest cost BOPP producer, Ross explained.
The BOPP films sale “is part of a long-standing practice to review assets and their potential value to others,” Ross said.
The deal is contingent on regulatory approvals. Neither ExxonMobil nor Jindal posited a likely timeline of its completion.
“We are excited to buy this business due to its excellent portfolio of premium products along with industry leading technology and R&D,” noted Jindal CEO Hemant Sharma in a news release. “We are equally excited to be acquiring an experienced and capable workforce.”
The agreement includes a technical center and sales office in Macedon, N.Y., and regional business and sales offices in Luxembourg, Spain, United Kingdom, Poland, Singapore, Italy, Germany and China.
Plastics News recently estimated the company’s North American film sales at $530 million.
Jindal Poly is part of the diversified BC Jindal Group which has interests in flexible packaging, photographic products, thermal power generation and steel.
Jindal Poly claims to have the world’s largest single site for production of BOPP and biaxially oriented PET films in Nasik, India.
Jindal’s current combined capacity for BOPP and PET films is 741 million pounds per year. The business had sales of $452 million for the year ended in March, the company said in a news release.