Indorama Ventures invests in Vietnamese PET converter amid regional consumption boom
10 Jan 2022 --- Indorama Ventures, a global petrochemical company, is acquiring shares in Ngoc Nghia Industry – Service – Trading Joint Stock Company (NN) in Vietnam, strengthening its market position for PET conversion in Asia-Pacific.
“This investment opportunity is in line with Indorama Ventures’ business strategy of expanding our footprint in rising economies like Vietnam,” notes Dilip Kumar Agarwal, CEO of Combined PET, IOD and Fibers Business at Indorama Ventures.
“The country is positioned to be the ASEAN production hub for the Asia-Pacific region. Moreover, Vietnam’s PET packaging market is expected to grow continuously due to strong growth in consumption and improving living standards.”
“The proposed acquisition would foster [environmentally] sustainable growth in our largest business segment – Combined PET – which has been growing constantly to serve increasing demands globally.”
Major brand relationships
NN is a leading PET converter in the region with long-standing relationships with major brands. It has four manufacturing sites in both the North and South of Vietnam.
Operating with high-quality standards, NN is a trusted provider of PET packaging products to major multinational and Vietnamese brands in the beverage and non-beverage industries.
Dilip Kumar Agarwal, CEO of Combined PET, IOD and Fibers Business at Indorama Ventures.
NN has a total production capacity of approximately 5.5 billion units of PET preforms, bottles and closures, equivalent to a PET conversion of 76,000 tons annually.
Indorama Ventures is reportedly the world’s largest producer of PET resin. In 2020, the chemicals giant announced that by 2023 it would be recycling nearly ten billion post-consumer PET bottles in Europe alone.
The announcement came after the Thailand-based company invested US$1.5 billion in its global recycling facilities. It aims to achieve the production of 750 million metric tons of recycled PET per year worldwide.
Expanding economies
An experienced management team with industry knowledge and local market exposure run NN’s business operations. These competitive advantages are strategic fits for Indorama Ventures and would complement the company’s long-term growth after integration, it says.
The company says the proposed acquisition will strengthen its market position in the packaging business in the Asia-Pacific region’s high growth markets.
Asia’s environmental sentiments
Rabobank has reported accelerated recycling activity in the region, particularly Japan and South Korea. Companies like Mitsui (Japan), SK Geo Centric (South Korea) and Kumho Petrochemical (South Korea) have formed partnerships with technology companies to set up advanced recycling plants, primarily in their home countries.
“South Korea and Japan are very concerned with [environmental] sustainability, especially energy transition and resource scarcity,” explains Hansen. “It is the philosophy in these countries [driving advanced recycling],” Susan Hansen, global strategist for food packaging and logistics at Rabobank, tells PackagingInsights.
Last year, India became the first Asian country to launch a plastics pact. The Plastics Pact for Asia brings together WWF India and the Confederation of Indian Industry with a shared goal to make all plastic packaging reusable or recyclable by 2030.
In bio-based developments, European Bioplastics recently revealed global bioplastics production will more than triple over the next five years (2021-2026), with Asia predicted to surpass 70% market share by 2026.
In this space, Suntory Group has created a prototype PET bottle from 100% plant-based materials for Orangina in Europe and Suntory Tennensui bottled mineral water in Japan. The beverage producer aims to eliminate all petroleum-based virgin plastic from its global PET supply by 2030.
By Joshua Poole
