Indian flexible packaging films manufacturer Jindal Poly Films (JPFL) has signed an agreement to acquire the global biaxially oriented polypropylene (BOPP) packaging films arm of Exxon Mobil Chemicals, for an undisclosed sum.
JPFL group chief financial officer Sanjeev Aggrawal said the purchase will allow the company to double its film manufacturing capacity and also enable it to venture into newer territories and access to advanced technology.
"While it will take some time to seal the deal finally, it will help us in increasing our current BOPP (biaxially-oriented polypropylene) capacity from 2.1 lakh tonnes per annum to almost 4.5 lakh tonnes per annum, and also increase our product portfolio," Aggrawal said.
Exxon Mobil's BOPP arm has access to technology for premium films, specialised and coated films, all of which form part of the deal, which will be financed through a combination of debt and equity.
With the new range of products manufactured by the Exxon unit, JPFL plans to enter the Asian markets.
The agreement to acquire Exxon Mobil's packaging arm encompasses five BOPP production locations in Georgia and Oklahoma in the US, and the Netherlands and Belgium in Europe.
The deal also includes technology transfer and sales office in New York and another office in Luxemburg.
"The market in India is currently growing at 15% and hence, while there is not much demand-supply gap, it is expected to widen going forward," Aggrawal added.
BOPP currently contributes up to 50% of the total revenues of Jindal, and market for the film is expected to grow further following the government's recent decision to allow 51% foreign direct investment in retail, which will also open up the food packaging sector.
JPFL, part of the BC Jindal Group, manufactures biaxially-oriented polyester (BOPET) films, which are used in flexible packaging.