Indorama Ventures Public Company Limited (SET: IVL), a global sustainable chemical producer, posted improved FY2024 earnings as management took decisive action under their transformational IVL 2.0 strategy to fortify the company against a prolonged industry downturn and set a new course for long-term sustainable growth.
In 2024, Indorama Ventures pivoted towards a seismic, generational change in the chemical industry, which is being irrevocably shaped by macroeconomic themes including the unequal impact of Peak Oil between East and West, China’s ambition to control its own production, India’s enormous growth engine, and one of the most unstable geopolitical environments in a generation. In a year of alignment, mobilization and launch, the company’s management executed the first year of their three-year IVL 2.0 evolved strategy—announced in March 2024—with a singular focus on optimizing global assets, reducing debt, enhancing cash flows, and implementing next‑generation digital and leadership programs to achieve ambitious stated 2026 targets.
These disciplined ‘self-help’ management actions, and an emphasis on controlling costs, helped bolster full‑year earnings as global chemical markets continued to struggle through one of the most challenging retractions in recent history. Amid this volatile backdrop, Indorama Ventures posted a full year EBITDA of $1,408 million in 2024, a 26% gain YoY, and an Adjusted EBITDA of $1,522 million, an increase of 10% YoY.
CPET segment delivered a 5% YoY improvement in Adjusted EBITDA of $1,012 million. Volumes rose 3% YoY on a like-for-like basis after adjusting for ‘make or buy’ decisions from reduced PTA capacity, as demand for end‑products remained stable. Persistent oversupply in China weighed on benchmark spreads and impeded the Integrated PET business. This was offset by improved integrated MEG margins, upholding the performance of the Intermediate Chemicals business which saw lower margins in MTBE from new third-party capacity in the U.S. Specialty PET outperformed YoY, making up for commodity PET margins.
Indovinya recorded Adjusted EBITDA of $352 million, a robust 29% gain YoY on a 4% rise in volumes, driven by a normalization of destocking and improved sales mix in South America and improved crack margins in North America.
Fibers reported Adjusted EBITDA of $159 million, a strong YoY growth of 26%, led by management actions to restructure the business, higher volumes across all market segments, and improved industry spreads in Lifestyle.
Leadership’s energetic measures to reduce costs, optimize business settings, and transform their organizational structures and processes made the difference to improved overall earnings. The asset optimization plan under IVL 2.0 has yielded an additional $48 million in fixed-cost reductions to date, with further enhancements expected to support earnings growth in 2025. These actions are boosting operating rates, which climbed 8% across the company’s manufacturing footprint in 2024.
Still, in light of continued industry pressures, the company has determined that further management actions are necessary, in addition to the significant measures already undertaken in 2024, in a sustained drive to achieve its objectives. These measures, which the company will share in more detail at its Capital Markets Day on 5 March, include redoubling the focus on generating free cash flow and reviewing finance policies to minimize forex impacts and ensure the company meets its deleveraging commitments. The company anticipates growth in 2025 and 2026 driven by management actions, volume improvement, proceeds from the sale of land from rationalized assets, planned IPOs, and divestitures, with the proceeds used to reduce debt in line with strategic goals.
Commenting on a momentous year of change, Group CEO Mr. Aloke Lohia, said “Despite the challenges in global chemical markets, I’m pleased with the overall result, and our management actions in 2024. This year was a defining one in our history—we embraced once-in-a-generation industry change and employed our experience, foresight, and confidence to transform ourselves and lean into the new reality through decisive self-help measures. Now, nearly a year into our three-year IVL 2.0 program, we have shifted from an acquisition-led model to a more disciplined, cash flow-driven approach, and we are on a new path of more sustainable, long-term value creation through organic growth and strategic partnerships. At our upcoming annual Capital Markets Day, I look forward to sharing more on our strategy’s progress and the road ahead.”
