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LyondellBasell LYB has completed the buyout of the polypropylene (PP) compounding assets of India-based Zylog Plastalloys Pvt. Ltd. The acquisition includes manufacturing sites in Sinnar, Maharashtra, and in Chennai, Tamil Nadu. The deal was announced in Nov 2015.
Polypropylene compounds are used to make thermoplastic materials for automotive, home appliances and other markets. LyondellBasell is the world’s biggest PP compounds maker with an annual capacity of 1.3 million metric tons.
The acquisition allows LyondellBasell to double its automotive customer base in India. The chemical giant has now become the third-biggest producer of PP compounds in India with an annual capacity of 44,000 metric tons.
India represents the fourth-biggest growth market for automobiles with 3 million new vehicles produced annually. The country’s automotive market is expected to grow 6%-8% annually through 2021, according to IHS Inc.
LyondellBasell remains focused on expanding its foothold in India and reinforce its position in the country’s growing automotive plastics market. The company, in Oct 2015, purchased India-based polypropylene compounds maker – SJS Plastiblends Pvt. Ltd – for an undisclosed price.
The acquisition is in sync with the company’s strategy to grow by expanding its competitive position in lucrative markets. LyondellBasell has supplied the Indian market through imports and tolling arrangements since 2009.
LyondellBasell currently sports a Zacks Rank #3 (Hold).
Better-ranked companies in the chemical space include Arkema S.A. ARKAY, Sinopec Shanghai Petrochemical Co. Ltd. SHI and The Dow Chemical Company DOW. While both Arkema and Sinopec Shanghai hold a Zacks Rank #1 (Strong Buy), Dow retains a Zacks Rank #2 (Buy).
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