Thailand-based polyester giant Indorama Ventures (IVL) has completed its acquisition of M&G Fibras Brasil, based at Cabo de Santo Agostinho. The plant that belonged to insolvent Italian PET producer M&G has capacity to produce 75,000 t/y of polyester staple fiber.

The deal marking Indorama’s entry into the fibers end of the polyester business in Brazil is a “strategic step forward,” the Thai group said, providing it with a “unique opportunity” to add capacity in fibers and establish its presence in South America's largest economy.

In 2018, the Bangkok-based group acquired the integrated PTA/PET complex of M&G Polimeros Brasil in Ipojuca for an undisclosed sum. The production facility with nameplate capacity of 550,000 t/y is the country’s largest.

M&G entered insolvency proceedings in October 2017.

In announcing the acquisition plans last spring, the world’s largest PET producer said the deal will significantly boost its presence in the fast-growing market Brazilian market, where domestic demand is expected to grow in response to a recent recovery in consumption.

In addition, Indorama said it is well-positioned to expand more into nonwoven applications, which are growing especially strongly in Brazil, supported by the presence of global brands. It added that the takeover in Latin America will also strengthen its Home and Lifestyle portfolio.

Indorama, which in recent years has swept up numerous assets from overextended players in the polyester fiber and PET markets, credits itself with having “an excellent track record of successfully integrating acquired business into its operations, and driving synergistic growth.”

In particular with the Brazil purchase, IVL said it will have the chance to supply PTA from a nearby location as well as consolidate its commercial offices. The group said it anticipates lowering fixed costs by creating synergies and operating efficiencies, driven by supply chain optimization. Synergies in logistics are expected to be realized from established free trade agreements with other Latin American countries.

Commenting on the closing, Indorama group CEO Aloke Lohia said IVL is “putting the puzzle pieces in place, and this acquisition is a perfect piece in the fibers market.”  It not only strengthens the Thai giant’s industry-leading position, he said, but also will help it to develop its strategy in Brazil and ensure continued employment and development of the national economy.