Indorama Targets 1.2 Million Tons of Global PET Production

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Researched by Industrial Info Resources (Sugar Land, Texas)--Thailand's Indorama Polymers (Bangkok) is undertaking a $300 global expansion plan that will move the company up from No. 7 in polyethylene terephthalate (PET) production capacity to No 2. Italy's M&G is the world's leading PET producer. Total global demand for PET polymers is about 13 million tons per annum (TPA), and with a growth rate of 8%-9%, the demand growth for the product is about 1 million TPA.

The company's Thai operation is investing $18 million to expand capacity at its Lop Buri site from 126,000 TPA to 180,000 TPA by mid-2008. Indorama has acquired 90% of Tuntex (Thailand) for $65 million. Tuntex, with a capacity of 250,000 TPA, was in rehabilitation and has been closed. Indorama will begin production at the plant in April and plans to bring capacity up to 300,000 TPA. Parent company Indorama Holding has acquired two PET plants for $83 million with a combined capacity of 355,000 TPA from Eastman Chemicals (UK). The plants are in Rotterdam, The Netherlands, and Workington, UK.

Indorama announced in August 2007 that it would build a 432,000 TPA PET plant at Decatur, Alabama. When completed by the end of 2008, the $160 million plant will be the largest of its type in North America and will obtain its feed from BP's (NYSE: BP) (London) integrated Decatur paraxylene/PTA plant on the Tennessee River. Indorama's PET capacity in North America will increase to more than 650,000 TPA combining the output of the new plant with its subsidiary StarPet Incorporated of North Carolina. By the end of 2009, the company's global PET capacity is expected to reach 1.2 million TPA compared with the current level of 603,000 TPA.

Indorama Group is the name for the group of unconsolidated businesses of the Lohia family. The businesses are owned and managed independently. In addition to PET production, the group has diversified business interests in PTA, wool, cement and petrochemicals. Total group revenue in 2008 is expected to rise to $1.28 billion from $820 million in 2007.

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