Thailand-based polyethylene terephthalate (PET) producer Indorama Ventures (IVL) has announced plans to construct a $700m integrated polyester facility in India.

The proposed unit facility will consist of purified terephthalic acid (PTA), PET and polyester staple fibre (PSF) plants fully-integrated with a third party paraxylene producer to ensure a captive supply of its essential raw material, while providing low cost access.

IVL has signed a memorandum of understanding with Indorama Synthetics (India) to enter into a joint venture (JV) that will construct and use the offtake of the plants.

Indorama Ventures group CEO and founder Aloke Lohia said: "We are looking at the long-term double digit growth in demand for such products and feel this is the right time to move into the market."

In its first full year of operation the new unit, which is Indorama’s fourth PTA plant in India, is expected to post a turnover of $2bn.

The plant will have an installed capacity of one million tonnes of PTA, and half of its products will be used for captive consumption, while 30% of the output will be used by Indorama Synthetics.

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IVL published a consolidated revenue of $5.5bn in the last 12 months and has the capacity to make 2.4 million tonnes of PTA, 3 million tonnes of PET and 1 million tonnes of PSF.

PET is commonly used in food and drinks packaging and PTA is the major raw material used in the production of both PET and PSF. PSF is a polyester alternative to natural fibres and allows the manufacturers of clothing and other soft products to produce low-cost items for a growing population.