IRP raises revenue target to B43 billion

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Bangkok Post

20-08-2008

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IRP raises revenue target to B43 billion

DARANA CHUDASRI

 

Indorama Polymers (IRP) has raised its revenue target to 43 billion baht this year from 35 billion thanks to high prices, robust demand and rising production.

 

 

The company, one of the world's largest polyethylene terephthalate (PET) polymer producers, reported record high revenues of 19.215 billion baht in the first half of the year, up from 11.697 billion in the same period last year.

 

 

First-half net profits were 1.588 billion baht, up from 509 million a year earlier.

 

 

CEO D.K. Agarwal told investors at a briefing yesterday that the average PET price was 51,502 baht per tonne in the first half, up 6.7% year-on-year.

 

 

The company's margins increased to US$243 per tonne at the end of June, up from $200 at the end of the first quarter and $212 per tonne the year before.

 

 

Mr Agarwal said that Asia Pet (Thailand), an IRP subsidiary, would soon complete an expansion to a capacity of 180,000 tonnes per year. It would begin commercial operations on Sept 10, with its capacity for amorphous PET polymers up by 54,000 tonnes per year.

 

 

Revenues for 2009 are projected to rise by 30-40% thanks to the expansion.

 

 

Indorama Ventures, which holds 38.9% of IRP, is in talks with the Spanish plastics company La Seda on a joint venture, merger or share swap. Mr Agarwal said a deal could raise Indorama Ventures' revenues to 300 billion baht per year. He expected a transaction to be finalised within three months.

 

 

A transaction would not have direct benefits for SET-listed IRP, save the opportunity to gain larger market share. A successful transaction with La Seda, which must be approved by the European Commission, would form an entity controlling half of the European market, compared with a market share of 20% now.

 

 

IRP shares closed yesterday on the SET at 9.65 baht, down 0.15 baht, in trade worth 3.25 million baht.