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Reliance pulls off polyester coup

Mumbai, June 24: Reliance Industries Ltd (RIL) will acquire Trevira, a one-time division of Hoechst AG, for €80 million (Rs 430 crore) — its second major overseas acquisition in a year, after Flag Telecom.

Trevira, a producer of branded polyester fibre, is headquartered in Frankfurt, Germany. Its plants in Bobingen and Guben (Germany), Silkeborg (Denmark) and Quevaucamps (Belgium) have a manufacturing capacity of 130,000 tonnes of polyester staple fibre and filament yarns. In addition, it has a state-of-the-art research and development (R&D) facility at Bobingen.

With several patents and technologies, Trevira is the leader in Europe’s market for high-value polyester derivatives, particularly in automotives and home textiles. The acquisition will enable Reliance to capture the vast growth potential in eastern Europe. Its manufacturing capacity will also increase to 1.8 million tonnes, making it the largest polyester fibre and yarn player in the world.

Announcing the acquisition at the company’s annual general meeting here today, Reliance chairman and managing director Mukesh Ambani said, “It gives us the opportunity to bring many of Trevira’s speciality polyester products to the Asian textile industry.” Reliance will, therefore, emerge as the leader in the global polyester market in just 22 years, he added.

The buyout agreement is subject to certain conditions, including a regulatory approval from the European Union, a Reliance statement said.

Reliance president in charge of polyesters, Subodh Sapra, said, “The integration will help Trevira and Reliance offer superior polyester products and better supply chain services to customers in Europe and other world markets.”

“This transaction will enable us to access new markets and raw material sources, leverage the Trevira brand and contribute our marketing skills and technology in speciality polyester fibres,” Trevira CEO Bernd Sassenrath said.

Reliance officials said the Trevira brand and products would now be available in India — one of the fastest-growing textiles markets in the world — through a sales network that is already well entrenched.

Trevira will, in turn, provide Reliance a strong footprint in Europe and put it in a position to cater to markets world wide.

Trevira was founded in 1956 as a business unit of Hoechst AG. It was spun off in 1998 as Trevira GmbH & Co KG. The firm posted a turnover of €316 million in 2003.

The acquisition has come at a time when Reliance is planning a massive expansion of its polyester capacity to capture the vast potential arising from the phase-out of the multi-fibre agreement from January.

Reliance is building an additional half-a-million-tonne of polyester capacity by investing in a 2.40-lakh-tonne staple fibre plant in Hazira, a 2.16-lakh-tonne-per-year polyester filament yarn plant at the same location and a 94,000-tonne polyester yarn plant at Patalganga.

Ambani said over the next 10 years, Reliance would invest in polyester research and development to sustain global leadership by building an intellectual property portfolio and developing an array of new products.

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