Spain's La Seda, Indorama mull 'integration'

25 July 2008 20:12  [Source: ICIS news]

LONDON (ICIS news)--Spanish polyethylene terephthalate (PET) producer La Seda de Barcelona (LSB) is mulling “a potential integration” with Indonesian rival Indorama that could give rise to the world’s largest PET supplier if the partnership is carried out as a merger, according to documents filed on Friday.

In a vague statement with Spanish stock market regulator Comision Nacional de Valores (CNMV), La Seda said the discussions were in a “preliminary stage”.

It said it has “held contacts with Indorama to study a potential integration” but it stopped short of saying such a deal would be a merger.

La Seda could not be contacted, as Friday was a bank holiday in Spain.

Analysts said that an LSB-Indorama merger would create a global PET giant with an annual production capacity of over 2m tonnes, eclipsing global leader Mossi & Ghisolfi’s 1.9m tonne output.

La Seda, which has led an aggressive PET expansion in recent years, makes 1.1m tonne/year of the industrial plastic, making it the biggest supplier in Europe. Indorama makes 966,000 tonne/year.

Indorama and La Seda have spoken in the past. Indorama tried to buy a La Seda factory in Madrid in 1996. The two companies also competed for the purchase of Eastman Chemical’s Cadiz PET factory in 2006.

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By: Ivan Castano Freeman
+44 20 8652 3214

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