In another step aimed at increasing its business with India’s growing automotive sector, LyondellBasell has agreed to acquire the polypropylene compounding assets of Zylog Plastalloys for an undisclosed sum. The transaction is expected to close in early 2016.

The olefins and polyolefins giant, headquartered at Rotterdam in the Netherlands and managed from the US, said the acquisition will double its automotive customer base in India and make it the third largest producer of polypropylene compounds in the country, with an annual capacity of around 44 million t/y.

Earlier this year, Lyondellbasell bought SJS Plastiblends, a manufacturer of PP compounds based in Aurangabad, Maharashtra, India. The Zylog deal 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 the group’s CEO, Bhavesh (Bob) Patel, adding that “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.”

The Dutch-based chemical manufacturer, which claims to be the world's largest producer of PP compounds with an annual capacity of 1.2 million t, has supplied the Indian market through imports and tolling arrangements since 2009.

India is regarded as the fourth largest growth market for automobiles globally, with 3 million new vehicles produced each year. Annual growth rates of 6-8% have been forecast up to 2021.