RELIANCE Industries has further cemented its position as the worldâ€™s
biggest polyester producer by agreeing to buy the assets of Hualon
Corp, a sick Malaysian entity.
Upon completion, the deal will increase Relianceâ€™s polyester capacity by 25% to 2.5 million tonnes and boost annual revenues by about $1 billion, a company statement said.
Reliance, which had captured Indiaâ€™s polyester market in the 1980s and 1990s through aggressive capacity build-ups and cheap acquisitions, is now looking to expand overseas. The Hualon buy is part of that strategy.
In 2004, it bought Trevira, a specialised polyester firm, for about $80 million. That acquisition gave it access to a niche product range of filaments and fibres. Hualon, in contrast, makes commodity polyester yarn and fibre and cloth. The buy gives Reliance about 500,000 tonnes of yarn and fibre capacity, besides plants in two other locations for other textile products.
Additional capacity apart, the buyout will give Reliance access to Hualonâ€™s clients, which include some of the worldâ€™s largest retail chains. Hualon, incidentally, is among Malaysiaâ€™s top five exporters and its two plants churn out fabric that are used by major textile and retail firms around the world. Reliance will control 7% of the worldâ€™s polyester yarn and fibre market after the takeover, the company said.
A Reliance spokesperson declined to disclose the price of the acquisition. As it involves only the companyâ€™s assets and not liabilities, the amount is unlikely to be large.
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