Leading PET producer Indorama Ventures has agreed to acquire Czech tire cord producer Kordárna Plus from private equity group Jet Investment for an undisclosed sum. The acquisition will make Indorama Ventures the biggest tire cord producer in Europe and the second largest in the world.

The deal is expected to complete during the second half of 2018, subject to regulatory approvals.

Jet told Bloomberg news agency in March that it is seeking to divest Kordárna and would like to sell by September 2018. The investment group acquired the tire fabric producer in 2010 when it went into receivership.

Commenting on the planned divestment, Igor Fait, managing partner of Jet Investment, said: “The selling of Kordárna to a strategic industrial player is a logical accomplishment of a successful turnaround on our side. Since we entered Kordárna in 2010, the company has strengthened its position in all aspects of the business and grown internally to be a leading tire cord producer in Europe.”

Indorama is gaining a complete portfolio of tire cord fabrics, including polyester, nylon 6 and 6,6, rayon, aramid and hybrids. Kordárna operates two plants in Veličkou, Czech Republic, and Senica, Slovakia, with a combined capacity for tire cord and technical fabrics of 50,000 t/y. It has 786 employees and supplies customers in more than 15 countries across Europe, North and South America and Asia.

Indorama said it expects to achieve synergies from Kordárna’s backward integration into polyester feedstocks and increased production flexibility. Post acquisition, the Thai producer will have 12 sites around the world producing a total of 127,000 t/y automotive fibers. Indorama said Kordárna’s sites are strategically positioned in Europe’s tire industry hub, where major car (and tire) manufacturers are located within a 500-km radius, producing roughly 3.7 million cars annually.

The automotive industry is one of Indorama’s key growth drivers. The Thai group estimates that it will have proforma revenue of $1 billion in 2019 once Kordárna is consolidated.