SET-listed Indorama Ventures Plc (IVL), a leading manufacturer of polyester and plastic packaging material, plans to continue expanding its business via mergers and acquisitions, expecting to clinch three deals in March.
The company aims to conclude three M&A deals in the month ahead, securing a fibre polyester business in India and two polymer businesses in Germany, said group chief executive Aloke Lohia.
IVL plans to expand its business further in India, where the company is ranked second among market leaders in the polyethylene terephthalate (PET) business, Mr Lohia said.
At present, the PET and fibre polyester businesses contribute 50% of the company's total revenue.
"M&A helps the company to reach local markets and [acquire] management and expertise," Mr Lohia said.
IVL is also looking to expand further in Africa and North America, he said.
After acquiring a majority stake in Medco, the largest PET packaging company in Egypt, IVL is eyeing other countries in Africa such as Ghana and Kenya, as they have high growth potential, while countries in South America are also interesting, Mr Lohia said.
He did not disclose an investment sum for the company's M&A strategy, saying only that IVL will look for opportunities to invest up to US$4 billion over the next four years.
This amount is in addition to the investment already made or announced of $1.5 billion in projects that are pending completion and their associated contribution to earnings in 2019, 2020 and 2021, according to the management's discussion and analysis filed by IVL with the Stock Exchange of Thailand.
Such an amount will derive from IVL's internal cash flow generated by the company's earnings before interest, tax, depreciation and amortisation (ebitda), which is expected to grow by double-digit rates, Mr Lohia said.
"IVL targets to become a leading global chemical [conglomerate] by 2023," he said, adding that three businesses with high growth potential include packaging, specialty chemicals and olefins.
The company aims for revenue of $14 billion this year or 35% year-on-year growth, with ebitda projected at $1.75 billion or a 30% year-on-year increase.
In 2018, IVL reported total revenue of $10.7 billion, up 27% year-on-year, with core ebitda of $1.44 billion, up 44% year-on-year.
Net profit was $819 million, up 33% year-on-year.
IVL recorded the most acquisitions in its history last year, with 12 new companies and three joint ventures.
The company strengthened its footprint in North America by acquiring the Corpus Christi joint venture. Once operational, the Texas-based project will provide a low-cost production platform for integrated purified terephthalic acid (PTA)-PET.
IVL made its first entry into South America by acquiring Brazil's largest PET manufacturing site, M&G Fibras.
IVL's recycling portfolio was enhanced by the acquisitions of Sorepla in France and Custom Polymers in the US.
IVL shares closed yesterday on the SET at 52.25 baht, up three baht, in trade worth 2.97 billion baht.
