Polyester producer Indo Rama Synthetics (India) is setting up a joint venture in the US with Pegasus Global of Thailand. It expects to close the deal in early April.
Named StarPet inc, the venture will acquire an operational integrated bottle-grade pet resin manufacturing facility with an installed capacity of around 70,000 tonne per annum from Tiepet International of USA.
Indo Rama will hold a 24 per cent stake in StarPet, and projects its revenue to cross $72 million by 2003-04.
The acquisition was structured by management consultants KPMG Atlanta on financial aspects and Cadwalder NY on legal and environmental issues.
OP Lohia, managing director of Indo Rama Synthetics (India) Ltd, said, "Tiepet's acquisition is a significant landmark in our strategic plans. This opportunity presents our group with an important inroad into the growing NAFTA market, and especially the PET business, which grew by over 10 per cent from 5.5 million to 8.5 million tonne per annum between 1998 and 2002."
Immediate revenue is expected from the acquisition by the joint venture as the Tiepet International facility is already operational, Lohia said.
The buyout will provide StarPet with easy availability of raw material in the US and a steady stream of customers, he added.
Indo Rama will be able to leverage its presence in the growing US market, besides using this opportunity to expand its exports.
Indo Rama Synthetics (India) Ltd is a dedicated polyester manufacturer with an integrated manufacturing complex at Butibori, near Nagpur producing around 3,00,000 tonnes per annum of polyester staple fibres, filament yarns and textile grade chips.