Indorama Ventures (IVL), a global leader in sustainable chemicals and fibers, reported a notable improvement in its third-quarter results for 2024, driven by strategic efficiency gains and steady demand across its diverse portfolio. The company's ongoing transformation under its IVL 2.0 strategy has begun to yield positive results, helping the business navigate a challenging global economic landscape.

For the third quarter of 2024, Indorama Ventures posted an adjusted EBITDA of $427 million, a 32% year-on-year increase, marking its first YoY improvement in 2024. This growth is largely attributed to steady volume growth, improved industry margins, and the successful execution of its ongoing optimization efforts. All three business segments – Combined PET, Fibers, and Indovinya – saw earnings growth despite the broader industry's ongoing recovery challenges.

The company’s efforts to optimize its operations and reduce fixed costs were particularly successful in the third quarter. Indorama achieved $19 million in fixed-cost savings, with further benefits expected to materialize in the coming quarters as the initiatives continue to scale. Operating rates across the business improved significantly, reaching 82%, up from 69% in the previous quarter, as the company completed its optimization programs for CPET (Combined PET) and Indovinya, with Fibers under active implementation.

Looking forward, the global economic outlook remains uncertain, with factors like inflation, geopolitical tensions, and supply chain disruptions continuing to impact demand. However, Indorama Ventures is optimistic about its trajectory. The company's management, under the leadership of CEO Aloke Lohia, has worked diligently throughout the downcycle to strengthen its core operations and position the business for sustained profitability. "The improved result proves how our diverse global business portfolio is advantaged through market cycles. We remain cautiously optimistic about margin recovery, even though it may take time due to excess capacity in the market," said Lohia.

Segment performances highlight operational success

Indorama Ventures' diverse business segments demonstrated strong performance, with notable gains across all areas:

CPET (including Intermediate Chemicals) posted adjusted EBITDA of $286 million, reflecting a 27% YoY increase. This growth was driven by steady demand for PET and slightly improved industry spreads. Operating rates for the segment rose to 84%, a sharp increase from 69% in the previous quarter, as optimization measures took hold.

Indovinya, the company’s crop solutions business, posted a robust performance with adjusted EBITDA of $103 million, up an impressive 93% compared to the same period last year. The peak season in the crops market, combined with a recovery in the coatings and construction sectors, contributed to the strong performance.

Fibers, which serves key sectors like lifestyle, mobility, and hygiene, reported adjusted EBITDA of $48 million, a 44% YoY improvement. This was driven by higher volumes in the mobility and hygiene sectors and improved industry spreads in the lifestyle segment. Indorama’s efforts to streamline operations and reduce fixed costs have further boosted profitability across this segment.

Digital Transformation and IVL 2.0 Strategy

In addition to operational improvements, Indorama Ventures is accelerating its digital transformation. The implementation of the SAP S/4HANA ERP platform has provided a strong foundation for the company's digital strategy, with early benefits already being realized in North America, where an AI-based procurement solution has been deployed. The company’s Connected Worker Platform is also driving manufacturing excellence, and its sales and supply chain solutions are expected to go live early next year.

The ongoing transformation of Indorama Ventures, coupled with the successful execution of the IVL 2.0 strategy, is positioning the company for sustainable growth in the years ahead. The leadership team's focus on cost optimization, digital tools, and operational efficiencies is driving enhanced earnings quality, even in a challenging market environment.

Outlook

While challenges persist in the global market, Indorama Ventures remains optimistic about its prospects. The company’s ongoing cost-saving initiatives, digital investments, and strategic focus on enhancing margins and operational efficiency position it well for continued improvement in the coming quarters. As the chemical and fibers sectors continue to recover from a prolonged downturn, Indorama Ventures is poised to capitalize on emerging opportunities while maintaining a strong focus on sustainability and long-term growth.

Indorama Ventures Public Company Limited is a global leader in petrochemicals, with a diverse portfolio that includes Combined PET, Integrated Oxides and Derivatives, and Fibers. With operations across Europe, Africa, the Americas, and Asia Pacific, Indorama Ventures serves major industries including FMCG, agriculture, automotive, and lifestyle sectors. The company reported revenues of $15.6 billion in 2023 and is listed on the Dow Jones Sustainability Indices.

www.inoramaventures.com