BANGKOK — Indorama Ventures Public Co. Ltd. (IVL) is acquiring Czech tire cord and technical fabrics producer Kordárna Plus a.s. in a deal Indorama said will make it the biggest tire cord producer in Europe and second largest globally.
The pending transaction, for which no financial details were disclosed, is expected to be completed during the second half of 2018, subject to regulatory approvals, Indorama said.
"Kordárna is one of the most recognized and trusted brands in the tire industry and has huge potential together with our PHP, Performance Fibers and Glanzstoff businesses," Indorama Ventures CEO Aloke Lohia said.
Kordarna operates plants in Czech Republic and Slovakia with combined tire cord and technical fabrics production capacity of 50,000 metric tons per year. Tire cord fabrics represent about three-fourths of Kordárna's sales, with products supplied to customers in Europe, North America, South America and Asia, the Thai petrochemicals company said.
IVL said it will integrate Kordárna within its existing operations in Europe. Post-acquisition, the company will have a dozen manufacturing sites for automotive fibers globally with 127,000 tons capacity.
This is Indorama's second acquisition in Europe in the past 15 months. It acquired Austrian tire cord manufacturer Glanzstoff Group in April 2017.
Kordárna's portfolio of tire cord fabrics includes polyester, nylon 66, nylon 6, rayon, aramid and hybrids. It claims to be the only integrated European company that undertakes the entire production process from fiber to the final fabric.
Indorama has singled out the automotive industry as a key area of business growth.
"The emerging trend of mobility is underpinning this growth, driven by a growth led by light weighting of cars and tires; fuel efficiency and safety," Mr. Lohia added.
Kordárna sites are strategically located in the European tire industry hub, where major tire and car manufacturers are located with approximately 3.7 million cars produced within a 310-mile radius.
In business since 1948, Kordarna acquired the plant in Senica, Slovakia — where its polyester capacity is located — in its December 2016 purchase of Slovkord Plus a.s.
IVL is buying Kordarna from Jet Investments, a Czech investment group that took over Kordarna in 2010.