SINGAPORE, Feb 28 (Reuters) – Thailand-based petrochemical group Indorama Ventures PCL (IVL.BK) is hunting for acquisitions especially in Europe and Africa as part of its strategy to speed up growth, its founder and group chief executive officer told Reuters.
“We don’t have anything in Europe at the moment on IOD (integrated oxides and derivatives) and therefore being a global firm, we can find some opportunities in IOD,” Aloke Lohia told Reuters in a virtual interview on Monday.
Indorama Ventures’ integrated oxides and derivatives (IOD) business makes chemicals for a variety of end uses, including food processing and agriculture.
Lohia said the company is also scouting for assets in Africa involved in making material used in plastic bottles and polyester, which are currently its main businesses.
The move comes as the Bangkok-based company, one of the world’s biggest petrochemicals producers, aims to double its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the next five years, Lohia said.
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“Organic growth is a good business,” Lohia said. “But for us to double our EBITDA, we need to grow at double digit, and to grow at double digit we needed a new growth engine which we have found in IOD.”
The company’s core EBIDTA jumped 43% to 79.87 billion baht ($2.27 billion) in 2022 from a year earlier, mainly driven by its IOD business.
The global petrochemicals industry is facing headwinds as energy prices stay volatile and demand stays muted.
Lohia, whom Forbes ranked as the 11th richest man in Thailand in 2022, founded the company in 1994 as Thailand’s first worsted wool yarns producer before venturing into the petrochemical industry a year later.
Indorama Ventures was in a comfortable financial position to pursue acquisitions, Lohia said. The company has some 21.21 billion baht in cash as at end-2022, while net debt-to-equity stood at 1.16 times.
The firm expanded rapidly mainly via acquisitions in regions including the Americas and Asia to become one of the world’s biggest petrochemicals producers with 147 manufacturing facilities across 35 countries, its website shows.
Indorama Ventures has made some 50 acquisitions in the past two decades with a total enterprise value amounting to $10.9 billion, according to its website.
Its biggest ever acquisition was its $2.08 billion purchase of Huntsman Corp’s (HUN.N) chemical intermediates and surfactants manufacturing facilities located in the United States, India and Australia in 2019.
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Reporting by Yantoultra Ngui; Editing by Anshuman Daga and Simon Cameron-Moore
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