Indorama Ventures in exclusive negotiation with Ultrapar in Brazil over Oxiteno subsidiary

Bangkok, Thailand – 18 June 2021 – Indorama Ventures Public Company Limited (IVL) is pleased to be in an exclusive negotiation with Ultrapar Participações S.A. for the possible purchase of the business of Ultrapar’s subsidiary Oxiteno S.A. Indústria e Comércio in Brazil. IVL would like to inform that at this moment there is no sale and purchase contract or commitment signed between the parties.

Oxiteno is a leading integrated surfactants producers in the Americas and the largest in Latin America, presenting a strategic fit for IVL’s Integrated Oxides and Derivatives (IOD) business, specifically its downstream surfactants portfolio. The transaction gives IVL access to innovative platforms in attractive end markets and technologies, enhanced geographical diversification, and strong innovation capabilities. The combined business would create a new market leader, becoming the largest ethoxylates producer in Americas and the second largest globally.

The IOD business of IVL and the Oxiteno business have both been built by family enterprises with a similar entrepreneurial mindset and with the shared belief that people and competitive assets are what make the difference. The Chief Operating Officers of both companies have shown good chemistry and operate with a similar philosophy and would be able to leverage on the synergies that each bring to the table.

This transaction would help accelerate IVL’s full value potential in IOD by immediately bringing to market its integrated surfactants portfolio in the US via Oxiteno’s asset in Pasadena, Texas. IVL’s original plan, Project Prosperity, to invest US$225 million to build specialty surfactants assets, is replaced by Oxiteno’s recently completed Pasadena facility and is now on track to deliver attractive earnings.

IVL’s surfactant portfolio was the star in the IOD segment in 2020, amidst the challenging COVID environment, and continues to perform into 2021. Both companies achieved similar adjusted EBITDA margins in 2020. The Company’s integrated surfactants business achieved slightly below 20%, while Oxiteno’s Latin America business registered an adjusted EBITDA margin in excess of 20% in 2020.

IVL’s Board of Directors has adopted prudent Net Debt/Equity ratio at approximately 1.5x, with the aim to return to 1:1 in the medium term. IVL’s objective is to have a strong balance sheet that allows it to grow sustainably. The Oxiteno transaction has committed financing tied up should the transaction materialize.

IVL is currently under negotiation with Ultrapar and hopes to successfully complete negotiations in the coming weeks.