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IVL- Kordárna: Aiming high

IVL- Kordárna: Aiming high

By Sharad Matade:

Kordarna is a unique investment opportunity and fits well in IVL’s overall growth strategy in the automotive segment, says Uday Gill, CEO, fibers division at IVL

Global chemical producer Indorama Ventures Public Company Limited (IVL) recently acquired Kordárna Plus a.s., the largest tyre cord fabric producer in Europe. The acquisition includes Kordárna’s one production site in the Czech Republic and one in Slovakia, with a combined tyre cord and technical fabrics production capacity of 50,000 tonnes per annum (tpa). Post the acquisition, IVL will have 12 manufacturing sites for automotive fibers globally with 127,000 tpa capacity.
Kordárna has been into manufacturing of specialised cord fabrics for the rubber industry and industrial fabrics for conveyor belts around six decades and Tire Cord Fabrics (TCF) represent about 75% of Kordárna’s sales. “Kordarna is a unique investment opportunity and fits well in IVL’s overall growth strategy in the automotive segment,” Uday Gill, CEO, fibers division at IVL, told Tyre Asia.
Kordárna is a recognised and trusted brand in the tyre industry and the only full range tyre cord manufacturer available in Europe. “Strategic asset located at the heart of the automotive supply chain in Europe, state-of-the-art production base with spare capacity for further growth and 70 years history of production excellence and culture of innovation are few of reasons that led us to acquire the company,” explains Gill. Kordárna today has 786 highly experienced management and skilled workforce and It also strong relationship with tier1 tyre and conveyor belts manufacturers globally.

Broad customer base

Having a broad customer base and long-established relationship, Kordárna has been supplying its products to major global tyre companies. Its products are supplied to customers in more than 15 countries in Europe, North America, South America and Asia. On the locations front, Kordárna’s both sites are strategically located in the European tyre industry hub, where major tyre and car manufacturers are located with approximately 3.7 million cars produced within a 500km radius, providing Indorama Ventures an optimal location for supplying TCF to meet growing customer demand.
R&D has become an essential focus for IVL. By integrating its various tyre cord fabrics companies, IVL has also developed a unique multi-materials expertise, from raw materials to finished tire reinforcements, which it can leverage on global basis. “Beside our internal capabilities, we have also developed open-innovation through selected cooperation with external research institutes and Universities globally. With its 70 years’ experience in the tyre and rubber industry, as well as a unique expertise in polyester, Kordarna will further strengthen our R&D capabilities,” says Gill.
Now after acquisition, the main challenge for both of the parties to synergise the businesses and avoid overlaps and have synergy driven business and culture. “IVL has a successful track record of integrating businesses to maximize value and managing synergy targets. Indorama Ventures will integrate Kordarna within its existing operations in Europe, offering synergies from backward integration into Polyester feedstocks and increased production flexibility,” says Gill. The acquisition is expected to offer IVL a growth in market share for PET tyre cord in Europe from 23% in 2017 to 34% in 2021. The company will synergy with its current portfolio from Trevira in Germany and Glanzstoff in Czech Republic.
On manufacturing side, the acquisition will help Indorama Ventures to enhance competency as Kordárna is into the entire production process- from the production of fiber to the final fabric. “There is huge potential together with our PHP Performance Fibers and Glanzstoff businesses to jointly create value for the customers and our stakeholders. This allows IVL to offer full range of tyre cord products (Nylon 66, Nylon 6, Polyester, Rayon, Aramid/Hybrid),” Gill said.
Kordarna also brings new capabilities into the rubber industry with its conveyor belt manufacturing which represent an interesting diversification opportunity for IVL and the chemical fiber plant (Slovakia) and textile plant (Czech Republic) offers ample expansion opportunities. “This fully invested asset base with low maintenance CAPEX required is sufficient to support projected revenue growth,” adds Gill.
The acquisition also elevates Indorama Ventures to be the second larger tyre cord fabric player globally. With the acquisition, the size of IVL portfolio is advantageous to its customers as the company can offer a one-stop shop services anywhere in the world. “We currently serve many of the world’s top tyre brands and we intend to continue to offer the excellence service they deserve by offering more components and high-quality, fast service, innovative and sustainable solutions,” says Gill.
With changing overall trends and tightening norms, tyres are expected to be greener, lighter and safer. The new trends and norms are pushing tyre cord fabrics suppliers to provide new materials and fabric constructions that will allow lighter tyre design. “Such materials will have to be stronger and lighter, but also more sustainable with strong emphasis on renewable raw materials and end-of-life recyclability,” says Gill.
Producing the perfect tyre for the new fleet of electric cars is a truly complex challenge. Tyres will be required to meet the demands for low energy consumption and a low rolling resistance to optimize the range of electric vehicles. “Reducing rolling resistance and noise while increasing handling and safety of the vehicle will be essential and finally, connectivity will be required to transmit real-time information from the road to the vehicle,” adds Gill.
On raw materials side, there will be increasing interest for renewable raw materials such as bio-based, according to Gill.
For expansion, the company will continue to seek the opportunities. “Obviously, managing such a diverse range of culture is a challenge, but we have a policy to keep the local staff to continue running the business, while we look at marketing and global raw material procurement,” says Gill.

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