Thai chemicals giant Indorama Ventures Public Company Ltd. (IVL), has entered into a joint venture agreement with India's Dhunseri Petrochem Ltd. (Dhunseri) to acquire its PET production facility in Egypt.
The facility, which belongs to the Egyptian Indian Polyester Company SAE (EIPET), is located in Ain Sokhna free trade zone, northwest of the Gulf of Suez and has a manufacturing capacity of 540,000 metric tons per year.
Terms of the sale were not disclosed.
As part of the deal, activities for manufacturing recyclable PET have commenced, with purified terephthalic acid (PTA), a key ingredient, to be shipped to the plant from Portugal.
Indorama acquired Sines, Portugal-based PTA Artlant PTA SA in November, and says it has successfully revived the PTA producer following the previous owner's bankruptcy.
The new JV, said IVL, will allow for “an uninterrupted supply of recyclable PET,” and will be one of the largest projects in the Europe, Middle East and Africa (EMEA) region. IVL's production spans from Lithuania in the northeast to Nigeria in west Africa.
The company is also the largest producer of recyclable PET in Turkey and has manufacturing capacity for PTA and PET in Rotterdam, the Netherlands and in the Iberian Peninsula.
The Egypt JV acquisition also comes after Bangkok-based IVL purchased M&G Group's PET facility in Brazil after M&G and its parent company entered bankruptcy earlier this year. IVL also is one of three companies in the JV named Corpus Christi Polymers LLC formed to buy M&G's unfinished PET plant in Corpus Christi, Texas. Its partners are Alpek SAB de CV of Mexico and Far Eastern Investment Ltd. of Taiwan.
Commenting on the deal, Phil Marshall, head of PET for consulting group PCI Wood Mackenzie, said the deal was not a surprise.
"The 50/50 joint venture comes as little surprise given the tightness of the current market. This will offer an outlet for PTA from the Indorama IVPP PTA plant in Portugal, which Indorama expect to be restarted in July,” Marshal said.
According to Marshal, Dhunseri Petrochem had an interest in the Egypt plant previously but it was excluded from the joint venture they formed with Indorama back in 2016 to manufacture PET in India.
The new production plant will increase Indorama Ventures' existing global PET capacity by 10 percent.