Indorama to moth-ball UK plant; improves 3Q earnings

Thailand-based polyester value chain supplier Indorama Ventures Public (IVL) is mothballing its PET plant at Indorama Polymers Workington in the UK as part of its plan to restructure its European business, it said in a recent filing to the Stock Exchange of Thailand. The firm says it will suspend production for up to one to two years "as margin performances continue to decline." The moth-balling will be effective not later than 31 March 2014 and will not have any material effect on the company's performance with customers served from other manufacturing locations in Europe with enhanced competitiveness, it said. The UK site may be operated again in two years' time subject to market conditions.

Meanwhile, the firm says it saw an improvement in its business in the third quarter of 2013, with revenue climbing by 11% to US$1.9 billion from US$1.7 billion in 3Q12. The company experienced its highest EBITDA of the past eight quarters, up 23% over the last quarter to US$131 million. In line with EBITDA growth, IVL achieved a net profit of US$35 million in 3Q13, versus US$7 million in 2Q13. A modest recovery of prices led to an inventory gain of US$8 million in 3Q13.

Its Asian business, which has seen the impact of tremendous oversupply of PTA in the region for a few years, reported an EBITDA of US$40 million in 3Q13 against US$28 million in the previous quarter. Its European business was steady but soft with EBITDA of US$16 million against US$17 million in 2Q13, due to regional oversupply, However, the North American performance has been consistent with EBITDA now at US$76 million and the full operation of its Oxide and Glycols plant likely to gain from better margins in an undersupplied industry.


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