Reliance Industries, announced that it had acquired Trevira, a polyester company in Germany, for around Rs 440 crore (E80m), taking it closer to the position of the world's largest polyester maker.
RIL, which is acquiring an overseas manufacturing facility for the first time in its history, has bought the majority stake in Trevira from Deutsche Bank.
Trevira, which was part of pharmaceutical major Hoechst, is a well-known polyester brand in Europe. It was spun off into an independent business unit in 1998. Since then Deutsche Bank has been the single largest shareholder in Trevira.
The Trevira acquisition along with other planned capacity addition by RIL will take its polyester capacity to 1.8m tonnes per annum (tpa), ahead of Taiwan-based Nan-ya which is the largest polyester producer in the world with a capacity of 1m tpa. RIL, which started with a 10,000-tpa polyester plant at Patalganga, now has a capacity of 8.9 lakh (0.89m) tpa.
Trevira, which is headquartered in Frankfurt, has a manufacturing capacity of 130,000 tpa (polyester staple fibres and filament yarns) spread over four locations in Europe - Bobingen and Guben (Germany), Silkeborg (Denmark) and Quevaucamps (Belgium). The company had a turnover of E316m in '03 and has 1,900 employees.
After scouting around for a overseas polyester manufacturing facility abroad for quite some time, RIL clinched the Trevira deal late on Wednesday night.
The company had been in discussions with Trevira's management for the last four months.
Nikhil Meswani, the director in charge of polyester business, and Subodh Sapra, head of polyester business, were part of the negotiating team. Mr Sapra, said: "The acquisition will help Trevira and Reliance to serve all customers in Europe and other world markets with polyester products and even better supply chain services".
Trevira's acquisition is significant for RIL on many fronts. First, it gives RIL access to the highly-competitive European market where the Trevira brand is the market leader in certain categories. Trevira makes specialised value-added products which find applications in automotive and home textiles sectors. It is a technology leader in special sectors, such as fibres for flame retardant fabrics or semi-technical textiles. Though RIL is present in the European market, it mainly operates out of its business office in Turkey.
Second, Trevira has a large R&D centre and possesses many patents and technologies. Trevira's knowledge base will complement RIL's existing R&D facility.
Two English chemists, John R Whinfield and James T Dickson, were the brains behind Trevira, when it began operations in 1956. Production of the first polyester filaments under the Trevira name commenced in Bobingen in the German state of Bavaria. As the first trademark for man-made fibres, Trevira became a generic name for the new fibres and the textiles made from them. Hoechst hived off its special fibres and filaments yarn division to form Trevira in 1998 as part of a restructuring plan.
RIL now plans to market the Trevira brand through its outlets in India. The company is planning to build additional capacity of half-a-million tonnes per annum. It is also planning to set up a polyester staple plant at Hazira with a capacity of 240,000 tpa and a 216,000-tpa polyester filament yarn plant at Hazira. Another PFY plant with a capacity of 94,000 tpa is being built in Patalganga.
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