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Rediff News  All News  » Business » Indorama SPL snaps up Nigerian firm for $225 mn

Indorama SPL snaps up Nigerian firm for $225 mn

March 11, 2006 05:13 IST
After a series of negotiations spread over almost a year, the SP Lohia-owned Indorama SPL has sealed the acquisition of Nigerian Eleme Petrochemicals for $225 million.

SP Lohia is the brother of OP Lohia, who manages the Delhi-based Indo Rama Synthetics.

The Indonesia-based company signed a share purchase agreement on February 27 with the Nigerian government to acquire the latter's 75 per cent stake in Eleme Petrochemicals.

"About 40 per cent of the payment has been made and the rest should be completed by June," said V S Baldwa, CFO, in a tele-conversation with Business Standard from the company's Jakarta headquarters.

The acquisition coincides with the commissioning of the company's $360 million purified terepthalic acid (PTA) plant in Thailand later in March.

This is claimed to be the world's largest single-train plant with a capacity of about 7 lakh tonne a year.

"Since the beginning of the Thailand project, the company has been looking out for opportunities in petrochemicals. The acquisition of Eleme is part of it," said Baldwa.

In a related development, the company is close to another acquisition - a textile unit in Egypt.

"It should materialise within three months," revealed Baldwa. Indorama is already engaged in a petrochemical project in the African country.

The $600 million company is the largest polyester producer in Indonesia and uses petrochemicals as raw materials.

It also has a major interest in textiles. Indorama emerged the preferred bidder after outracing the consortium of Dangote Chemicals and Transnational Corporation of Nigeria and LG Chemicals.

The acquisition of Eleme fits into the company's portfolio. The Nigerian company, which has a capacity of about 3 lakh tonne a year, produces monoethylene glycol, propyethylene and polypropylene.  "The company's operations are similar to ours and MEG can be used to produce polyester," Baldwa said.

An official from its Indian branch added that about 40 officials of the company from various international offices have already been shifted to Nigeria.

"Preparetory work has begun to start the operations." he said. The company has a presence in India through its subsidiary Indorama Cement, based in Mumbai. It has a one million tonne plant in Raigad, about 100 km away from the city. The company markets it products under the brands - Commando and Durocem.

Indorama SPL, started by the Lohia family two decades ago, is also involved in chemicals, cement, rubber products, real estate development and other infrastructure projects. It has manufacturing and marketing facilities across Asia, Europe, Africa and Latin America.

Prince Mathews Thomas in Mumbai