Posted January 16, 2018

BANGKOK – Indorama Ventures Public Company Limited (IVL), a global chemical producer, and Huvis Corporation (HC) of South Korea announced their intention to establish a 50:50 joint venture for the development, construction and operation of a low melting fiber (LMF) plant in the U.S.

 

The location is being finalized and the joint venture is expected to be established this year and operational in 2019, subject to various agreements and regulatory approvals as may be applicable.

The new, state-of-the-art plant will manufacture LMF, with an annual capacity of 60,000 tons. LMF is commonly used as a binder fiber in core-sheath constructions to produce HVA applications for automotive and industrial composites, such as wadding, insulation, filtration, automotive acoustic insulation material and other products where heat is used to bond the fibers.

 

The initial volumes of LMF will be sold in the U.S., with its new, low-tax environment and the potential to significantly expand its scope into neighboring regions over time. LMF sales are expanding at a rate of 8 percent a year as manufacturers have been converting from conventional chemical adhesives to a thermo-bonding method.

 

In his News Update report emailed to subscribers and members of the Synthetic Yarn and Fabric Association (SYFA), Alasdair Carmichael of Carmichael International responded to the news: “This is big news and follows the filing of an anti-dumping suit in the U.S. against the suppliers of polyester low melt staple fibers from Korea and Taiwan. The preliminary dumping rates are expected to be announced in January.

 

“Total U.S. imports of low melt in 2016 were 92,000 tons, with 68 percent from Korea and 31 percent from Taiwan,” he continued. “The two leading Korean suppliers are Huvis and Toray Korea. The only U.S. producer of commodity low melt polyester staple fiber is Nan Ya and they recently announced an expansion of capacity. There has been a significant increase in consumption of low melt fiber in the U.S., with applications in automotive insulation end uses.”

The decision to form a joint venture builds upon Indorama Ventures’ successful feedstock integration strategy and a continued focus on expanding High Value-added (HVA) portfolio. The JV will leverage Huvis’s best-of-breed technology and its strong customer base in the region as well as Indorama Ventures’ global management capabilities and its strong manufacturing and cost position.

 

With this joint venture, both companies will be able to offer the best value to customers through depth and scale using the new company’s combined capabilities and expertise. Customers will be assured of better security of supply and excellent service.

 

“We are delighted to have the opportunity to partner with Huvis, and looking forward to further develop a strong relationship,” said Aloke Lohia, Group CEO of Indorama Ventures. “Our partnership will be a strategic step for both Indorama Ventures and Huvis to emerge as a regional leader and position us well to take advantage of the robust growth potential in the region. This is an exceptional opportunity for both companies to provide unique value for customers, and bring new exciting fibers and composites solutions to market.”

 

“We are so pleased to work with Indorama Ventures to build stronger market presence in North America, one of our core markets for LMF business,” said Shin, You Dong, CEO of Huvis.” As one of leaders in LMF, we are pursuing a ‘glocalization’ strategy to better serve our key customers’ needs based on more efficient and cost-competitive platform. We will continue to collaborate and extend our relationship with Indorama Ventures to seek more synergies in other interesting polyester fiber markets with strong growth potential.”

Source: Indorama Ventures