Thailand’s Indorama enters PET recycling in Brazil via Resinas takeover

11, Jun. 2020

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BANGKOK, NNA - Thailand’s major petrochemicals maker, Indorama Ventures Public Co., has advanced into the PET (polyethylene terephthalate) recycling business on the South American continent through a takeover of a Brazilian company.

The company acquired a 100 percent stake in AG Resinas Ltda, a chemical products maker and PET recycling firm, for an undisclosed sum on Monday, it said in a filing with the Stock Exchange of Thailand on Tuesday.

“Brazil is a large and thriving new market for us,” Richard Jones, senior vice president of Indorama Ventures, told NNA on Wednesday. "We believe that Brazil has strong underlying fundamentals, supported by government policies to stimulate economic growth and strengthen the domestic market.”

The chemical giant bought the largest PET production facility in Latin America’s largest economy in 2018, which is now Indorama Ventures Polimeros S.A., its indirect subsidiary. Last year, it acquired a second production facility, Indorama Ventures Fibras Brasil Ltda, according to Jones.

Resinas, which processes post-consumer PET into Recycled Polyethylene Terephthalate (rPET) flakes and pellets, has an annual processing capacity of 9,000 tons in Juiz de Fora, north of Rio de Janeiro, the country’s second-largest city, the senior vice president said.

“These acquisitions put us at the top of a key South American market and initiated our position there,” he said. The company plans to recycle up to 750,000 tons per year by 2025 across the world. It had such facilities abroad in France, Ireland, the Netherlands, Mexico and United States.

Since 2011, the Thai group has recycled 50 billion PET bottles globally, equivalent to 1.1 million tons.

In March this year, Indorama Ventures said it had agreed with Coca-Cola Beverages Philippines Inc. on the establishment of a PET recycling joint venture with an annual capacity of 30,000 tons near Manila to start operation in 2021.

In the first three months of 2020, the company posted EBITDA of over $200 million from combined PET businesses, the highest contribution of the $304 million in total while gaining the rest of the profit from fibers as well as integrated oxides and derivatives.