PolyOne Corporation, the global major of specialized polymer materials, is set to acquire India’s leading engineering plastic compound maker Formulated Polymers Ltd.
The $3.2 billion PolyOne, which operates through subsidiary Polymer Polymers India Ltd in India, will acquire a majority stake in a deal worth Rs.150 crore, according to two people aware of the development.
“The discussions are a in final stages and the deal to be concluded in a couple of weeks time,” said one of the persons cited above.
Established in 1993, Formulated Polymers Ltd designs and manufactures a range of thermoplastic compounds, specializes in Engineering Plastics.
Major customers of Formulated Polymers Ltd include Ashok Leyland, Ford, Hero Honda, Bajaj, Mahindra, TVS Motor, Tata, Hyundai, Maruti Suzuki, Godrej, Whirlpool, Samsung, LG, Siemens, Misubishi, Philips and Indian Railway.
Mails sent to PolyOne and FPL did not elicit any responses.
Engineering plastic compounds is a group of compounds – substituting plastic for metals and widely used in automotive and industrial applications. The end-use industries of engineering plastic compounds are automotive, aerospace, construction, consumer goods, home appliances, electrical, electronics and healthcare.
The market of engineering plastic compounds will see a huge growth in backdrop of the fast growing automobile industry in India. Recently, India has overtaken Germany to become the fourth largest automobile market in the world, after China, US and Japan. Passenger and commercial vehicles sales in India grew by 9.5%, in 2017 to more than 4 million units.
In automotive space, these compounds are used mainly for gears, radiator fans, oil filter housings and junction boxes.
As the industry in India is growing fast, several global giants have take the acquisition route for their India presence.
LyondellBasell, one of the world’s largest plastics, chemical and refining companies, had made multiple buyouts in India to strengthen its position in plastic compounds space. The NY based company had acquired polypropylene (PP) compounding assets of Zylog Plastalloys Pvt. Ltd. in 2016 and SJS Plastiblends Pvt. Ltd’s PP compounding business in Aurangabad in 2015. With these buyouts, LyondellBasell became one among the largest producer of PP compounds in India.
In 2013, China’s plastic manufacturer Kingfa Sci & Tech Co Ltd has entered India by acquiring a majority stake in Chennai-based Hydro S&S Industries Ltd (HSSIL), a manufacturer of reinforced polypropylene compounds. French specialty chemicals major Rhodia SA had acquired PI Polymer, the engineering plastics business of PI Industries in 2011.
Source: Economic Times