Dhunseri Petrochem Ltd, the petrochemicals division of Kolkata-based Dhunseri Petrochem & Tea Ltd, has joined hands with Thailand-based Indorama Ventures Public Company Ltd (IVL) to form a 50:50 joint venture to manufacture and sell polyethylene terephthalate (PET) resins for the Indian market and exports.
As part of the agreement signed between the two companies, Dhunseri will pick a 50 per cent equity stake in the 216,000 tonne Micro Polypet Pvt Ltd (MicroPet), a company owned by Indorama Ventures in Haryana, for about Rs 110 crore, subject to adjustments.
Dhunseri Petrochem will also transfer its liabilities of more than Rs 550 crore to the new entity as per the agreement. The plant commenced operations in March 2014. Total sales of MicroPet stood at Rs 155.93 crore in the financial year 2014-15.
In turn, IVL has agreed to pick a 50 per cent equity stake in Dhunseri Pet Global, with an effective capacity of 4,80,000 tonnes PET manufacturing located in the eastern state of West Bengal. IVL would subscribe to new equity shares for Rs 418.76 crore.
“This joint venture will bring scale benefits to all stakeholders. The Indian JV between both the organisations will benefit from IVL’s global presence and technological leadership,” said CK Dhanuka, chairman of Dhunseri.
“This joint venture will allow us to gain the highest benefits by covering a larger geographical area of the fast-growing Indian market with a complementary and experienced partner. India has a well-educated and booming middle class that will embrace the modern, hygienic lifestyle offered by PET packaging,” said Aloke Lohia, group CEO and founder of Indorama Ventures.
Dhunseri Petrochem Ltd is one of the largest producers of PET resin in India and among the top 10 in the world. The company manufactures bottle grade PET resin for packaging of drinking water, carbonated soft drinks, edible oil, pharmaceuticals, etc.
On the other side, IVL has a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. It has about 14,000 employees worldwide and consolidated revenue of $7 billion in 2015.
The proposed JV is, however, subject to regulatory approvals and expected to complete in the second half of 2016.