CEO Message
This report outlines Indorama Ventures’s success in focusing on the sustainability and climate issues that matter most to our customers, employees, shareholders, and communities in 2023. This past year has reinforced the need for businesses to focus on climate change. Indorama Ventures is moving quickly on several fronts, and we are leading our actions in line with our core value of being responsible.
Moreover, we created a purpose statement, ‘Reimagining chemistry together to create a better world’, which we believe defines how we view our role and maintains our focus on the positive impact that we have on our world.
Business strategic imperative requires ESG action and commitment to turn our vision and purpose into values and impacts that can make a difference.
Dilip Kumar Agarwal
What are your overall thoughts on Indorama Ventures’ operational performance from 2023?
In 2023 we continued to strengthen our core businesses, expand our value-added portfolio, and enhance our operational excellence. Through our past acquisitions and greenfield projects, we have unmatched market reach and offer diversified products to our customers. Our integrated portfolio spans a diverse geographical footprint, coupled with our people’s diligence and resilience. We are proud to be a part of the solution for a more sustainable future by producing essential materials that are used in everyday products, such as food and beverage packaging, personal hygiene products, medical supplies, automotive parts, textiles, and many more
In 2023, our business faced significant macroeconomic and geopolitical challenges, resulting in a 53% decline in full-year EBITDA to $1.12 billion from its peak of the year before. These headwinds were characterized by conflicts in Ukraine and the Middle East, customer destocking, rising inflation, higher interest rates, and dampened global growth. We also faced margin and volume pressure from new supply in China and the U.S., especially as China’s recovery from the pandemic lagged other markets. Increased imports from Asia weighed on our higher-cost operations in Western markets.
Despite the challenging market conditions, we maintained our strong credit rating of AA- by TRIS. We also expanded our share of sustainability-linked to harmonize our financing strategy with our sustainability and circularity goals.
As the year progressed, we saw that the global chemicals industry was facing significant structural shifts that required a renewed approach to our long-term sustainable growth path. We recognized that what worked for us in the past will not work going forward, and we had to evolve our strategy to adjust to the new market environment. In the second half of the year, we developed a new plan that utilized our distinctive global integration competencies, which we have built over 30 years. Our Indorama Ventures 2.0 strategy, which we announced in March 2024, is a significant transformation of our business approach, signaling a new era of sustainable growth for our company.
In this ever-evolving landscape, how do you see Indorama Ventures navigating its path forward?
The chemical industry is facing unprecedented challenges and opportunities regarding global environmental and social issues, such as climate change, resource scarcity, human health, and the circular economy. The impact of climate change, for example, underscores the need for a low-carbon, circular, and bio-based economy - and we are responding by taking proactive measures.
Amid these challenges, we remain agile, and our primary concerns are the health, safety, and well-being of our employees, customers, and communities. At the same time, we are ensuring business continuity by delivering essential products and services that meet our customers’ evolving needs and accelerating our efforts to reduce our environmental footprint.
Through continuous focus and investments in technologies and processes for producing recycled and bio-based PET, the development of our sustainable solutions like Deja™ recycled products, HVA resin modifiers, and Glanz™ PET films, are reducing our dependence on fossil-based feedstocks, driving circularity within our product portfolio and lowering product carbon footprint. Additionally, we are transitioning our operations towards renewable energy sources and supporting low-carbon solutions for customers and society.
Based on the World Economic Forum’s (WEF) Global Risks Report 2023, which monitors the most severe short- and long-term global risks facing economies and societies, we are addressing our financial and regulatory impact by analyzing our carbon pricing, emission standards, environmental taxes, subsidies, and incentives.
Beyond adapting to shifts in consumer preferences and technological innovation to address some of the risks highlighted by the WEF, we are monitoring our legal and reputational impacts. We adhere to high standards of product stewardship and perform regular life cycle assessments to enhance our sustainability performance. To tackle sustainability challenges in the chemical industry, we are increasing our energy efficiency and use of renewable energy sources, enhancing water stewardship and waste management, and supporting low-carbon solutions.
How is Indorama Ventures shaping the next generation of leaders?
As a people-centric global sustainable chemical company, we recognize the critical importance of hiring and retaining talent, but also nurturing the next generation of leaders who will steer the future trajectory of growth and performance.
In addition to promoting a culture of innovation, collaboration, and diversity across our global operations, we have established an Innovation Center in Thailand to showcase research and product testing and enable an exchange of expertise. We have also established partnerships with universities, research institutes and industry associations to promote knowledge, best practices, and innovation that advances the circular economy.
As a leader in the chemical industry, what is Indorama Ventures focusing on to create a sustainable future?
To promote a sustainable future, we are leveraging our unmatched global footprint, diverse workforce, and innovation to deliver value for stakeholders. We are implementing circular practices throughout our operations, from the procurement of raw materials to end-of-life solutions. This approach involves minimizing waste to reduce our environmental impact.
We generate positive social outcomes by engaging with communities and through employee development programs. These initiatives have a positive impact on every area of our work and reinforce our position as a preferred partner for our customers, suppliers, investors, and communities.
Our sustainability strategy is the foundation of our decision-making process and ensures long-term value creation and business resilience. Its pillars include a low-carbon business model, circular economy principles, recycling regulations, stakeholder collaboration, future-needs modeling, and innovation.
We face several challenges in our pursuit of a sustainable future. To address the absence of a standardized global regulatory framework for plastics and recycling, we are advocating greater alignment and coordination between policymakers, regulators, and our industry to promote improved clarity and compliance.
Our partnerships, collaborations, and investments across the value chain are helping to make sustainable feedstocks and technologies more available and affordable by promoting innovation through a full understanding of technical, economic, and environmental hurdles as they arise.
Finally, we are addressing the increasing expectations of our stakeholders by implementing improved processes for data collection, reporting, and assurance. These efforts include enhancing our ESG management and communication systems, and aligning with global frameworks and standards, such as the International Sustainability Standards Board.
Dilip Kumar Agarwal
- Deputy Group CEO and Group Chief Financial Officer
- Member of the Sustainability and Risk Management Committee
