BANGKOK (Dec. 9, 2014) — Global tire reinforcements producer Performance Fibers has agreed to sell its Asian business unit — comprising principally one polyester yarn production unit in China — to Indorama Ventures P.C.L. of Bangkok, a leading petrochemical producer.
Financial terms of the deal, expected to close within three months — were not disclosed.
Indorama Ventures said combining this business with its existing assets in fibers will create a business unit with annual sales of at least $850 million. Previously IVL bought PHP Fibers G.m.b.H. in Oldenburg, Germany, and Trevira G.m.b.H. of Bobingen, Germany, over the past three years.
IVL said the acquisition represents a continuation of its strategy to increase and strengthen its presence in high value-added automotive safety applications.
Performance Fibers said its business in Europe and the Americas will continue to operate separately under the ownership of Sun Capital Partners Inc.
“This acquisition is a great strategic fit for IVL,” said Aloke Lohia, vice chairman and group CEO. “We are acquiring a company that has an established premier position in the life-critical end-use applications in the tire industry across the world. The company has a proven management team with a track record of value creation, expanding the business at 17-percent CAGR over the last 4 years.”
Performance Fibers' plant in China, located in Kaiping, Guangdong, spans 820,000 square feet on 23 acres of land and has 800 employees. The plant opened in 1993 as a joint venture; Performance Fibers took full control in 2005 and over the past four years has more than tripled the plant's capacity.
IVL described the plant as the second largest facility of its kind in China.
IVL already operates a specialty PET polymers plant in Guangdong, which can provide synergies in the raw material supply chain, IVL said.
IVL acquired PHP Fibers in April, providing it with plants in Obernburg for polyamide and polyester high tenacity yarns, and Scottsboro, Ala., for polyamide fiber production, as well as a joint venture for fine denier polyamide industrial yarns in Pingdingshan, Henan. PHP sells under the Diolen, Enka Nylon, Enkalon and Stanylenka brand names.
IVL aquired Trevira in 2011 in a joint venture with Sinterama, an Italian company with experience in specialist fibers. IVL holds 75 percent of the shareholding in Trevira, which makes Trevira-branded polyester fibers and filament yarns for the home textiles, apparel and automotive industries, the hygiene sector and technical applications.