Bangkok--21 Aug--Indorama Polyners
Indorama Polyners Plc (IRP), the world’s second largest Polyethylene Terephthalate (PET) producer, said that it was expecting its revenues this year to rise by as much as 25% to a record high of 47 billion baht despite some slowdown that maybe witnessed during the third quarter.
Dilip Kumar Agarwal, the chief executive officer of IRP, said that the company would likely see its revenues this year hit 47 billion baht on the surging demand from the emerging markets such as China, India and others including Thailand, while the third quarter may witnesses some increase in volume as the company plans to commercially operate its first line at the new plant in the United States.
Mr. Agarwal said that the net profit margins for the company would be maintained at around 5.4% for this year and it is expected that this would rise further next year.
Mr. Agarwal revealed that the company’s production capacity for this year would rise to around 1.4 million tonnes an increase from the 958,000 tonnes the company had in 2008, while its actual production would be 1.05 million tonnes from 807,227 tonnes it had in 2008.
This he said would help the company reach its sales target of 47 billion baht for this year from 41 billion it saw in 2008.
These production capacities do not include its newly acquired asset under Indorama Polyester Industry Plc (which is part of the Indorama Ventures Group, the parent company of IRP).
IRP and IPI have a joint agreement to sell products from the production facilities of IPI.
Mr. Agarwal said that the sales in the third quarter would be slightly lower than those seen in the second quarter because it’s a low season of the industry while spread of product starts to see some narrowing.
The company has also decided to delay the start up of the AlphaPET in the United States as it wants to undertake some technological changes to enhance the efficiencies of the plant.
“We decided to postpone the commercial production of PET production in the US by 2 months which was done in order to improve the technology. However, it won’t generate much impact to our overall third quarter production or sales,” he said.
IRP spent US$182 million to build PET bottle production plant in the US and the first phase of this is expected to start production in the first week of September.
According to the plan to improve production technology, the production will be postponed to September and November for the second line, therefore the full income from the investment is expected to be realized from the start of next year.
“We will order Indorama Polyester Industry Plc (IPI), which is our subsidiary to produce 90,000 tonnes of PET bottle to supply us in the fourth quarter. Next year, our production is expected to increase further from 1 million tonnes at present. Even our sales volume is expected to decline in the third quarter because it’s a low season and products spread decline but IRP hopes to boost sale volumes higher,” he said.
He confirmed that the company will maintain net profit margin at 5.4% this year which is equal to the rate in the first half of this year and increases from 3.8% seen during last year due to the growth of sale in China, India and Thailand.
This comes on top of the stable growth of sale that is currently been seen in the US and Europe. However, worldwide demand is expected to rise in the next year especially for the US and Europe which should reach 1 million tonnes.
At present, demand for PET generates growth more than 3% which also boosts market share to IRP in world market while the company also generates advantages from the shutting down of several production plants in the North America and Europe as they became uncompetitive in the global market.
“We expect to see demand for PET bottle grow around 5-6% in the next year due to economic recovery in some countries such as Brazil, Russia, India and China while our subsidiary like IPI is also expected to gain high competitive level due to low production cost. So, we believe that IRP will generate a sharp rise in next year mainly from the rising of capacity as much as 500,000 tonnes and market recovery in the US and Europe again from stable economic situation,” he concluded.