Indorama Ventures had previously announced its agreement to acquire M&G Fibras Brasil on 2 November 2018, following the acquisition of Brazil's largest PET asset announced in the first quarter of 2018. This acquisition is the Company's debut into the fiber business in Brazil and is a strategic step forward. It provides IVL a unique opportunity to add capacity in fibers and establish its presence in South America's largest economy, Brazil.
The acquisition will significantly boost IVL's presence in the fast-growing market in Brazil, where the domestic demand is expected to grow in response to a recent recovery in consumption. In addition, IVL is well-positioned to expand more into nonwoven applications which are growing strongly in Brazil, supported by the presence of global brands. The acquisition will also strengthen the Company's 'Home and Lifestyle' portfolio.
IVL has an excellent track record of successfully integrating acquired business into its operations, and driving synergistic growth. IVL anticipates lowering its fixed costs by creating synergies and operating efficiencies, driven by supply chain optimization with the delivery of PTA from a nearby location, and consolidation of its commercial offices by joining with IVL's PET site. Further synergies will be realized through logistic advantages due to established free trade agreements with other Latin American countries.
Commenting on the closing of the acquisition, Mr. Aloke Lohia, Group CEO of Indorama Ventures, said,
"We are putting the puzzle pieces in place, and this acquisition is a perfect piece in the fibers market. Not only does it help strengthening our industry-leading positioning, but it also enhances our ability to serve the growing needs of customers with high-quality fibers. This acquisition will help develop our strategy in Brazil and ensure continued employment and development of the national economy as well as strengthen the fibers industry.
We are excited to welcome M&G Fibers to the IVL family, and look forward to leveraging our integration capabilities to ensure that we generate the greatest value for our customers and shareholders."