Reliance Industries to Buy Assets of Hualon

India’s Reliance Industries Ltd., the largest polyester manufacturer in the world, has reached an agreement with the receivers and managers of Hualon Corp. Sdn. Bhd. to buy its assets. The cost of the acquisition is in the range of $250 million.

This is the second a cquisition for Reliance.  At the start of this year Reliance acquired Trevira, the European polyester fibre company, which has a polyester capacity of 1.3 million tones a year. Trevira’s sales in 2006 were about Rs 1,815 crore

The deal will raise Reliance's polyester-making capacity by 25% to 2.5 million metric tons a year. The purchase will increase Reliance's share of textile polyester to more than 7% of the global market.

For the year ended March 31, 2007, Reliance Industries posted revenue of 1.109 trillion rupees ($27.38 billion) and net profit of 109.08 billion rupees (US2.69 billion).

Hualon has a polyester-producing capacity of half a million metric tons a year. Hualon has further processing capacity to make 30,000 tonnes of nylon, 150,000 tonnes of PET bottle grade chips and about 400-500 million yards of fabric a year. Reliance says that Hualon’s turnover of $800 million can be taken up to $1 billion.　

Through the buy, Reliance will also have a ready market for products from its refineries such as PTA [purified terephthalic acid] and MEG [monoethylene glycol]. PTA and MEG are formed by refining crude oil and are used as raw materials for the manufacture of polyester staple fiber and polyester staple yarn.

Hualon is significant to the forward side with blended yarn, textured yarn and fabrics which is largely being exported to America and Western Europe, will give Reliance Industries a presence across the value chain -- from polyester manufacturing to textile production.

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