João Parolin CEO South America – IOD Division, INDORAMA VENTURES LIMITED
"Integration is running smoothly, and the expectation is that until 2025 we will have approximately US$100 million in synergies from the Indorama - Oxiteno merger."
The acquisition of Oxiteno by Indorama Ventures Limited (IVL) closed in March. How is the integration progressing?
Before closing we already started working on a set of different streams for manufacturing, procurement, sales and marketing, R&D, legal, and so forth. This was done respecting all the restrictions as the two companies were previously competitors, and we had consulting firms preparing the ground for us to start working on synergies immediately after the conclusion of the deal. Indorama had a big list of customers and good position in the US, whereas Oxiteno had a large list of customers and knowledge in the Latin American markets. Another area of synergy is related to procurement as we both used to buy the same raw materials.
Integration is running smoothly, and the expectation is that until 2025 we will have approximately US$100 million in synergies from this merger. We are now the largest producer of ethylene oxide in the Americas.
How do the products of IVL’s Integrated Oxides and Derivatives area (IOD) contribute to sustainability?
Our IOD business unit serves markets like crop solutions, home and personal care (HPC), paints and coatings, and oil and gas. In all these markets we have seen customers transforming their businesses towards a more sustainable profile. For example, the detergents industry has been developing concentrated products where they can save on packaging and transportation to lower their scope three emissions and carbon footprint. In collaboration with customers, we have developed products that help produce concentrates which use less water, less packaging, and have a lower carbon footprint. The paints and coatings industry is moving more towards water-based solutions and paints that have less hazardous air pollutants. We recently launched a coalescing agent which is environmentally friendly and will enable customers to produce a more sustainable paint. In terms of crop solutions, we offer surfactants and solvents which can be mixed into different solutions that are safer to the farmers and the environment.
Oxiteno alone has launched approximately 130 new products over the last five years, and now that we are part of the IVL team our sustainability efforts have multiplied and the results of our R&D and innovation will be even faster.
Can you elaborate on IVL’s sustainability plan for 2030?
This year IVL launched its vision 2030, whose ambition is to grow organically and develop its industrial leadership in sustainability towards 'net zero', and supported by three main pillars: Future Ready Organization, Decarbonize Our Operations and Innovative & Sustainable Products.
To support these pillars, IVL has 11 strategic priorities connected with the United Nations Sustainable Development Goals (UN SDGs) and its targets considering a recycling commitment to leverage circular economy and reduction of waste disposal in landfills; water, energy consumption and GHG emissions reductions; employee's safety and health; and a sustainable product portfolio through increased use of renewable raw materials.
Recently IVL’s has committed to the "Science - Based Targets" initiative (SBTi) strengthening the company’s Climate Change Strategy which includes Circular Feedstock – replacing fossil fuel-based feedstock with circular (bio-based and recycled) feedstock; Green Projects - Invest in operational & energy efficiencies to reduce GHG emissions; Renewable energy and Coal Phase Out; Mechanical and advanced recycling; Decarbonatization Technologies – Exploring opportunities for Carbon Capture; And Natural Capital Solutions - Invest in carbon offsetting projects.
Which business lines and final markets in Latam is IVL interested in?
In both Latam and North America, the two companies had similarities in terms of final markets. For instance, Oxiteno has been strong in crop solutions products for major customers. Our agriculture business has now grown even bigger with the merger. Another important market for both is HPC. In addition, Oxiteno has always been strong in the paints and coatings market in South America, which is beneficial for IOD as we can now roll out these technologies in the North American market as well. One of IOD’s important markets in Australia is mining and these technologies can now also be deployed in Latin America.