Saturday, August 22, 2009

Indorama sees 20% growth in 2009 revenue

PLASTICS

Indorama Polymers, the world's second-largest producer of PET polymers, expects its revenue to grow by 20 per cent this year thanks to higher production capacity from a plant in the United States and an upward demand trend in Asia.

Company chief executive DK Agarwal said the two plants acquired by the company in March in Europe and expansion in production of StarPet in the United States would increase sales from 820,000 tonnes in 2008 to 1.05 million tonnes this year.

It plans to start commercial operations of Line 1 of the AlphaPet project in Alabama in September and Line 2 in November. The plant's annual capacity is 432,000 tonnes.

Agarwal said the capacity expansion project had been delayed for a few months because of what he called technology modification and contractors' issues.

However, he said the opportunity loss was not high because of flat demand growth in the US and negative demand change in Europe. The supply side has also become tighter because of the closure of two PET-polymer plants with capacity of about 600,000 tonnes per annum.

Despite no demand growth in the US and Europe, the global demand for PET is growing more than 3 per cent this year and is forecast to hike to growth of 5-6 per cent in 2010 following higher demand for plastic bottles in emerging countries, including Brazil, Russia, India and China.

Indorama Polymers posted net sales of Bt21.9 billion in the first six months of this year, an increase of 13.8 per cent from the same period in 2008. Net profit was up 103.8 per cent year on year.

The spread in the second quarter was US$222 (Bt7,570) per tonne. However, Agarwal said the spread trend in the third quarter would be lower since the product price was increasing at a slower pace than the rising oil price.

The company forecasts average oil prices moving between US$70-$80 per barrel in 2009, he added.

Indorama Polymers previously set a goal to list in the world's top three largest PET makers by 2010. However, as a result of the shutdown of many plants, including that of Spanish producer La Seda, it has stepped up to become the second-largest PET producer, behind only M&G.

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