Patel had recently bought SJS Plastiblends.
AB Wire
LyondellBasell Industries, the Houston-run petrochemical giant run by Bob Patel, is continuing its growth in India’s burgeoning automotive industry, agreeing Monday to buy the polypropylene compounding assets of Zylog Plastalloys.
The deal comes just a few months after Patel bought SJS Plastiblends, which also manufactures polypropylene compounds to build plastic automotive parts in India, reported Fuelfix.
LyondellBasell said the Zylog deal will double its automotive customer base in India and make it the third largest producer of polypropylene compounds in the country with an annual capacity of 97 million pounds.
The terms of the deal are not being disclosed but LyondellBasell said the company plans to extend job offers to all 140 or so Zylog employees associated with the polypropylene compounding business.
In a statement, LyondellBasell CEO and Chairman Bob Patel said he is excited about India’s growth and rapidly expanding automotive market.
“The acquisition of SJS and Zylog are part of our plan to strategically expand our footprint where it makes sense from an economic and strategic perspective,” Patel added. “With these investments, LyondellBasell will be a leading producer of PP compounds in all major automotive growth regions of the world.”
Patel is a a second generation Indian American, whose family moved to the U.S. when he was a child. SJS Plastiblends is located in Aurangabad, Maharashtra. The Zylog assets are closer to Mumbai in Sinnar, Maharashtra, as well as in Chennai, Tamil Nadu.
LyondellBasell is the world’s largest producer of polypropylene compounds with an annual capacity of 2.6 billion pounds. These compounds are used to manufacture automotive parts, home appliances and more. India now represents the fourth largest growth market for automobiles globally with 3 million new vehicles produced each year. According to IHS Inc. report cited by LyondellBasell, India’s automotive market is expected to grow by 6 to 8 percent annually through 2021.
Fuelfix reported much of LyondellBasell’s growth is focused on India and the U.S. Gulf Coast. Patel is overseeing $4 billion in planned spending for a rapid succession of expansion projects along the Gulf Coast by 2020, including additions to LyondellBasell’s Channelview complex by Houston.
Earlier in November, LyondellBasell said it plans to build a new plant near Houston at its Channelview complex that would represent the company’s largest capital investment ever.
The PO/TBA plant would produce 1 billion pounds of propylene oxide, 2 billion pounds of tertiary butyl alcohol and its derivatives annually. Propylene oxide is a chemical used to make everything from antifreeze to cosmetics. The tertiary butyl alcohol is a byproduct used as a solvent to make chemicals and gasoline additives.