Indorama Ventures Limited (IVL), a global chemical producer, registered volume growth of 18 per cent in the fiscal year 2019, driven reportedly by inorganic expansion. Industry-wide spreads declined to historical lows in 2019, leading to 20 per cent reduction in IVL’s core EBITDA, as company stated. Operating cash flow increased 33 per cent to $1.3 bn.
“IVL now has three strong growth engines to generate continued returns for its stakeholders. The first is the combined PET segment, which includes its key feedstocks and recycling business; the integrated oxides and derivatives segment, which includes the recent acquisition of the Spindletop assets; the completed IVOL gas cracker in Louisiana; and lastly the fibres segment, which serves mobility, hygiene and lifestyle verticals,” Aloke Lohia, group CEO of Indorama Ventures, said.
“Our global reach, with around 80 per cent of capital invested in Europe and Americas, makes our business model resilient to events happening in any particular country or region. On the other hand, our end-product strategy of serving the packaging, hygiene and safety needs of society, leads to our growth in excess of GDP growth, Lohia said.
IVL concurrently has undertaken several transformative initiatives that were announced on February 4, 2020 and are expected to generate benefits starting in 2020 and targeted to lead to $350 mn in run rate cost savings by 2023. These initiatives and the strategic acquisition of the Huntsman Integrated Ethylene and Propylene Oxide (EO & PO) assets (code-named Spindletop); footprint expansion into a growing market in India; formation of a dedicated team to grow the PET recycling business; continued focus on working capital optimization coupled with an increased emphasis on leadership development are the key strategic priorities for the group.
“Going forward, we will reinforce our strengths via 5 strategic priorities: cost transformation, asset full potential, adjacency growth, recycling leadership and leadership development,” Lohia said.