Thailand-based IVL has a host of companies around the world which generate a combined annual revenue of close to 70 billion baht and profit of nearly 7 billion. The company is expanding its reach overseas, but only one of its subsidiaries, IRP, is listed on the Stock Exchange of Thailand.

In an interview with the Post’s Umesh Pandey, the group’s chief executive, Aloke Lohia, explains his plans for the company, which has grown by making opportunistic acquisitions regardless of where they are located.

Q: What was behind IVL’s aggressive global growth over the past few years?

A: In a proactive move toward maximizing its value chain and operational synergies, IVL expanded its Pet and polyester business. We entered into the PTA business with the acquisition of three PTA plants in 2008 to achieve our goal of vertical integration. We believed that the PTA industry bottomed out in 2008 and we anticipated an up-cycle. Our operations during the first half reaffirmed that our strategy was correct as we have already surpassed our conservative estimates. As for the PET business, the growth has been planned in phases as we have put up large scale new generation assets within close proximity of the customer base, something that has helped us stay ahead of the cost curve as well as maintain a sustainable and competitive position. The growth in the polyester business was planned through the acquisition of distressed assets to enable us to expand our scale while giving us the opportunity to enhance our product mix.

Q: Does this mean IVL is looking at future acquisitions? Are there any on the horizon?

A: We will continue to remain focused on maintaining our commitments and are willing to invest in the polyester business. The current period is witnessing an accelerated rationalization of high-cost, non-focused players with inefficient facilities. Many of these companies were struggling prior to the financial crisis. The rate of plant closures has enables us to add new capacity in the three operational fields where we lag. This coupled with the continued rise in demand means the industry’s rationalization is expected to continue, creating an opportunity for companies like IVL.

Q: Why is demand for polyester chain on the up during the global downturn?

A: Our industry has seen demand rise because it provides a staple product. While economic growth has slowed the demand for PET, PTA, and polyester is expected to see 6% to 7% CAGR (compound average growth rate) between this year and 2012.

Q: Given these favorable conditions will the industry’s up-cycle be longer this time around?

A: The global PTA market dynamics are expected to remain favorable for the next four years as demand is expected to substantially outstrip capacity due to sustainable demand an delays in building new plants. The fact that is takes about three years to build a enw plant means that new capacity will not come on stream until 2012 or 2013 at the earliest.

Q: You have never revealed details about IVL, something that makes a lot of people wonder where the finances are coming from?

A: IVL is a private company with 95% held by the Lohia family and the remaining by our bankers such as Bangkok Bank Plc and DEG. The company has performed very well thanks to the uptrend in the global polyester chain business. In the first six months IVL had sales of more than 35 billion baht, while its earnings before interest, tax, depreciation and amortization (EBITDA) stood close to 5.7 billion, with net profit of around 3.4 billion.

Q: With all these acquisitions and such a strong financial position, is IVL aiming to be a leading global player in the near future?

A: We are currently the world’s 12^th largest PTA producer and the second largest PET maker. But our aim is not to be a merchant of the products we operate in, we want to be integrated while catering to the niche, not mass market.