POLYPLEX

Polyplex in Thailand

Polyplex (Thailand) Public Company Ltd. (PTL/ Polyplex Thiland), is a subsidiary of Polyplex Corporation Ltd.

The Company commenced commercial production in April 2003 with its first Polyester Film line located in Rayong province. With the start of production at its second PET film line in November 2003, it has a total capacity of 39000 MT.

In September2004, it also successfully started operations of batch poly condensation PET chips plant. After the startup of the continuous process PET chips plant in February 2005, PTL has total capacity of 52500MT and has become self-sufficient in its raw material requirement and improve its value addition.

To broaden its product portfolio and improve value additions, PTL commissioned a Metalliser in June 2005 with a capacity of 5000 MT.

PTL is focusing on supplying to the fast growing Packaging, Industrial and Electrical PET Film applications in the Asia-Pacific region & USA and will address the emerging shortages in these segments. Thailand has a healthy business environment and is a major producer of PET Chips, the raw material for PET Film.

The expansion in Thailand is an integral part of Polyplex's strategy to emerge as an important and profitable player in the Polyester Film business at a global level and it shall ensure:

	A phased and sustainable growth in capacity.
	Reduction in the Company's overall cost of production.
	Strengthening of its competitiveness through a continuous process of improvement including upgradation in technology, broad-basing of product offering and efficient use of capital.
	Delivering the best returns to the investors benchmarked to the industry.

PTL has in December 2004, made an Initial Public Offering of its shares and is listed on the stock exchange of Thailand. Polyplex Corporation Ltd continues to be the majority shareholder, directly and indirectly, controlling 70% of ordinary shares of PTL.
The funds mobilized were utilized for:

•	Procurement of machinery for:
		Reduction in the Company's overall cost of production.
		Other Capital Expenditure / Accessories
•	Additional Working Capital Requirements
•	Repayment of loans to lenders

As a measure of forward integration, an Extrusion Coating line was set up at the existing site in Thailand in April 2008. This will convert the base film to products for the Thermal Lamination markets with the primary markets in the US. Simultaneously efforts would be made to develop markets in Europe and South East Asia. The economics of this project are based on the following:

Improvements in the product mix of the Company
Low operating cost in Thailand
Integration with existing manufacturing operations resulting in optimization of operating and capital cost
Leveraging of existing Sales and Distribution network

As a measure of growth and improving its product offering to its customers, a Cast polypropylene (CPP) film line along with a Metallizer is under implementation at the existing site in Thailand. The economics of this project is based on the following:

De-risk current business by diversifying product portfolio, although small in terms of investment & volumes
Broad-base offerings for Packaging converting industry
Leverage existing Sales & Distribution Network
Capitalize on existing & projected demand growth in SEA. Existing Capacity balance in SEA is fragmented- 40% with 3 players, 10% with In-house consumption & balance 50% with single/double line capacity, with low-speed, small width/low capacity, Older lines having Quality/productivity issues
Entry into Commodity Films & graduate to Specialty/Barrier films later
Low operating cost in Thailand.
Integration with existing manufacturing operations resulting in optimization of operating and capital cost.
Thus, Polyplex will have advantage of wider width line, more productivity, lower cost, higher volumes, better market-spread/reach over Standalone CPP Companies, who are focused on local markets

The project is being set up at an estimated capital cost of USD 12.5 million and is likely to commence production by mid-2009.