BANGKOK -- Indorama Ventures, the Thailand-based petrochemical producer, said Tuesday it is planning to buy tire-cord fabric makers in Mexico and France, as it expands its reach in the automotive sector on the back of rising demand for lightweight, high-performance materials.
The company has agreed to acquire DuraFiber Technologies Mexico by the third quarter of this year and will finalize an agreement to purchase of DuraFiber Longlaville of France around the same time. The value of the transactions has not been disclosed.
Indorama is the world's largest maker of PET resin used to make plastic bottles. It has been aggressively adding tire material manufacturers to its portfolio, namely Performance Fibers China in 2015 and Glanzstoff, a European producer, earlier this year.
The Thai company is diversifying into more high value-added products. The automotive industry is a "key growth driver," CEO Aloke Lohia said in a statement. At present, high value-added materials account for half of Indorama's earnings before interest, tax, depreciation and amortization.
The company foresees a rise in demand for materials used in electric vehicles and self-driving cars. Production of lightweight cars is set to increase by more than 30% over the 10 years through 2025 to 118 million vehicles a year, it estimates.
DuraFiber was previously called Performance Fibers, changing its name after Indorama acquired the global rights to the Performance Fibers brand in 2015 when it acquired Performance Fibers China from a U.S. investor.
DuraFiber is the only maker of tire fiber cords in Mexico and supplies global tire companies in the Americas. It sources material from Indorama's PET plant in Mexico, located on the same site as DuraFiber's factory.
The Mexican plant makes nylon tire cord fabric and high-performance industrial textiles that are used in products such as conveyor belts, hoses, air bags, seat belts and safety harnesses. It has a total capacity of 37,500 tons annually.
The French plant will mainly supply the European market.