LyondellBasell acquires Indian compounderLyondellBasell acquires Indian compounder

LyondellBasell has entered into a definitive agreement to acquire the polypropylene (PP) compounding assets of India's Zylog Plastalloys. Upon completion of the acquisition, LyondellBasell will double its automotive customer base in India and become the third largest producer of PP compounds in the country with an annual capacity of 44,000 tonnes (97 million pounds). 

Earlier this year, LyondellBasell acquired SJS Plastiblends Pvt. Ltd. (SJS), a manufacturer of PP compounds located in Aurangabad, Maharashtra, India. The Zylog acquisition includes manufacturing sites in Sinnar, Maharashtra, and in Chennai, Tamil Nadu.  

"We are very optimistic about India's economic growth and rapidly expanding automotive market," said Bhavesh (Bob) Patel, CEO and chairman of the management board of LyondellBasell. "The acquisition of SJS and Zylog are part of our plan to strategically expand our footprint where it makes sense from an economic and strategic perspective. With these investments, LyondellBasell will be a leading producer of PP compounds in all major automotive growth regions of the world," he added.

LyondellBasell is the world's largest producer of PP compounds with an annual capacity of 1.2 million tonnes (2.6 billion pounds). These compounds are used to manufacture automotive parts, home appliances and other products. LyondellBasell has supplied the Indian market through imports and tolling arrangements since 2009.

India represents the fourth largest growth market for automobiles globally with around 3.8 million new vehicles assembled in 2014 according to the International Organization of Motor Vehicle Manufacturers (OICA). Over 2 million vehicles were manufactured in the first half of 2015. According to IHS Inc., India's automotive market is expected to continue growing by 6 to 8 percent annually through 2021. Additionally, the World Bank has predicted India's GDP to grow at a rate of 8 percent by 2017.

The transaction is expected to close in early 2016. Until the transaction is complete, Zylog will conduct business as usual and continue to provide the same level of support, service and high quality products to its customers.