Two new movements in Thailand’s industrial sector involve inorganic expansion. Padaeng Industry expects to seal a deal to co-invest with unnamed European company in recycle business, while Indorama Ventures PCL makes the first acquisition of the ethylene in the United States.
PDI to form JV with EU firm for recycle biz
Thailand-based zinc producer Padaeng Industry PCL (PDI) plans to make a 51:49 joint venture with a European recycle-technology firm to diversify into recycle business in Thailand.
This deal is expected to finalise this month before being submitted to the Board of Directors for approval by the end of this year, said PDI’s managing director Francis Vannellen.
Initially, the JV firm plans to invest around one billion baht in establishing a recycling business, focusing on industrial and hazardous wastes such as electronic parts and batteries.
Besides, PDI is negotiating with four other companies in the Philippines, Cambodia and Myanmar to acquire their businesses, mostly related to renewable energy. However, Vannellen declined to disclose the detail for now.
He added that it aimed at producing and selling 75,000 tonnes of zinc per annum in 2015 and 2016 to serve the domestic demand.
He cited that the world’s zinc demand has declined continuously because of sluggish economy and a slowdown of construction industry in China. As a consequence, the price has gone down from its forecast at $2,200 per tonne to $1,750 per tonne.
However, the revenue will not be much different from the target in the beginning of this year thanks to the baht depreciation.
Thailand’s IVL to buy ethylene cracker in US
Thailand-based integrated downstream petrochemical producer Indorama Ventures PCL (IVL) has signed a purchase and sale agreement to acquire a 76-per-cent stake of an ethylene cracker in the United States through its subsidiary USA Indorama Ventures Olefins LLC from Occidental Chemical Corporation for an undisclosed amount.
This acquisition makes IVL the first Thai company to take advantage of the shale gas revolution in the US.
The company’s statement cited that the Lake Charles cracker, located in Louisiana, can process both ethane and propane feedstock to produce approximately 370,000 tonnes of ethylene and 30,000 tonnes of propylene per annum.
Currently, the plant is not operated and is expected to start commercial production before the end of 2017 on completion of required refurbishment and maintenance.