IVL projects B4.5bn loss from Lop Buri shutdown

Indorama Ventures Plc (IVL) expects a revenue loss of US$150 million (4.5 billion baht) from the six-month closure of its Lop Buri plant next year because of floods, but the SET-listed company expects sales will grow by 25% to 240 billion baht in 2012.

The world’s largest integrated polyester chain producer aims to conclude a major acquisition worth 6 billion baht in the final quarter, giving it a presence in the US, Europe and China, with yearly revenue of 12 billion baht.

Group CEO Aloke Lohia said yesterday that the Lop Buri plant was projected to resume full production in the middle of next year. Producing wool, polyethylene terephthalate (PET) and bottles, the Lop Buri factory has been closed since Sept 23.

Floodwaters have receded to 30 centimetres from a peak of 1.7 metres. IVL has turned to its other PET facilities in Rayong, Indonesia and China to offset output losses. It operates 27 manufacturing sites globally.

IVL reported a third-quarter net profit of 3.6 billion baht, up 24.3% from 2.9 billion in the same period last year. Nine-month consolidated net profit was 17.02 billion baht (3.61 baht a share), against 6.45 billion (1.53 baht a share) a year earlier.

In the three months to September, IVL’s revenue grew 114% year-on-year in baht terms to 51 billion but was relatively flat quarter-on-quarter. In the first nine months, total revenue was 142 billion baht and the company expects full-year revenue of 190 billion baht.

Next year’s turnover is projected to reach 240 billion, thanks to capacity expansion and a full year of output from its US-based AlphaPet plant, which was down in the third quarter following a tornado.

IVL was recently granted approval to acquire Wellman, a producer of PET and fibre with plants in Ireland, Belgium and France. Wellman will start to contribute revenue to IVL this quarter, he added.

‘‘We are running at full capacity in the US and Asia, but slowing by 10% in Europe as customers are hesitant to buy, and we don’t want to hold too much inventory and shoulder inventory losses later,’’ said Mr Lohia, noting the market was very volatile because of European weakness.

Shares of IVL closed yesterday on the Stock Exchange of Thailand at 31.50 baht, down 75 satang, in trade worth 776.7 million baht.