IVL revises up target on higher capacity

IVL revises up target on higher capacity

Revenue projected to reach $6.5bn this year

SET-listed Indorama Ventures Plc (IVL), the world's largest polyester-chain manufacturer, has upgraded its revenue forecast this year to US$6.5 billion (194 billion baht) from $5.19 billion (155 billion baht), thanks to capacity expansion and demand growth.

The revised revenue forecast represents 110% growth over last year's $3 billon as IVL's production capacity is projected to increase 80% to 5.4 million tonnes, group chief executive Aloke Lohia said yesterday.
While economic uncertainties in the US and Europe have negatively affected sentiment in those markets, consumer demand has yet to feel the pinch, he said at a briefing at the Stock Exchange of Thailand yesterday.
The US market makes up 32% of IVL's global revenue, with Europe accounting for 27%, on par with the contribution from Asia, he added.
In the first half, IVL's revenue was up 105% from the same period of 2010 to $3.02 billion with second-quarter sales rising 130% year-on-year and 27% quarter-on-quarter to $1.69 billion.
Six-month net profit rose three-fold on an annualised basis to $441 million. Although second-quarter earnings of $79 million were 78% lower than those in the first three months, they were higher than $63 million posted a year earlier.
"The main drivers for the second-half results are the acquisitions made in March while the plants shut down in the second quarter have resumed the operations to contribute to volume growth," Mr Lohia said.
IVL's AlphaPet plant in Alabama and Indorama Polyesters Industries in Rayong are fully operational in the third quarter after an unplanned shutdown due to tornadoes in the US and a breakdown, respectively.
IVL's polyethylene terephthalate (PET) revenue soared 132% to $2.06 billion in the first six months as polyester fibre business surged 95% to $400 million. Sales of purified terephthalic acid (PTA) rose 48% to $555 million.
The global PTA-PET spread was at a historical high in the first two quarters, driven by consolidation in Europe and the US, said Mr Lohia.
The company has planned to invest $2 billion this year and next, of which $800 million has already been spent this year, out of the total $3.8 billion through 2013.
Shares of IVL closed yesterday on the SET at 39.75 baht, down 1.25 baht, in trade worth 711.3 million baht.