mothballing opens market

The Nation

Indorama Polymers (IRP), one of the world's leading PET producers, expects to increase its market share in Europe and the United States next year, as some competitors are mothballing plants or delaying new supply as a result of the liquidity crunch and cost pressure.

According to industry data, many European PET (polyethylene terephthalate) plants such as Elana, Artenius San Roque and Equipolymers Ottana have announced production shutdowns in the second half of this year.

Similarly, US giants Invista and Wellman have announced shutdowns of some of their production.

However, IRP has invested through its subsidiary AlphaPet to set up a PET plant with an annual production capacity of 432,000 tonnes in the United States.

The facility is 73 per cent complete. The first production line is scheduled to start up in April, with the second line scheduled for June.

Chief executive officer DK Agarwal said this would be good timing for the new plant, as the new operation could take up some of the demand left uncatered for by the shut-down plants in the US.

Although there will be no new supply in the next two years, except AlphaPet's organic plant, PET demand in the US is forecast to be about 4 million tonnes per year with an annual growth rate of 5 per cent.

"PET demand will be driven by branded beverages such as Coca-Cola and Pepsi and large converters, whose businesses still have robust growth. In addition, it is an opportunity for us, as those companies will shift their orders to consistent and reliable suppliers," he said.

IRP chairman Aloke Lohia said the company was in talks with Spain's La Seda to expand its business in Europe. However, he said it would not undertake any new acquisitions in the next six to 12 months.