Indorama Ventures Public Company Limited (SET: IVL), a global sustainable chemical producer, this week reported a decline in third-quarter earnings as chemical manufacturers continue to confront profound long-term shifts in the global industry. Management’s decisive ‘self-help’ actions under the company’s far¬-reaching IVL 2.0 transformation plan are helping to optimize the business to succeed in a substantially reshaped operating environment.
Indorama Ventures posted Adjusted EBITDA1 of $285 million in 3Q25, a 14% decline quarter-on-quarter (QoQ) and a 33% drop year-on-year (YoY). Sales volumes fell 3% QoQ, and 9% YoY, mainly a result of maintenance turnarounds. The company announced a dividend of 0.175 baht.
The global chemical industry is grappling with record overcapacity and subdued demand amid a prolonged period of unprecedented macro-economic shifts marked by geopolitical tension, technological advances, changing consumer behaviour, and environmental factors, leading to a new world order for chemical markets.
In March 2023, Indorama Ventures launched IVL 2.0 to address the energy crisis in Europe and pricing disparities between eastern and western polyester feedstock markets that have arisen from electrification. The sector’s earnings in 2025 and 2026 are expected to be weaker, driven by unresolved tariff negotiations and fractured supply chains.
Commenting on the global situation, Mr. Aloke Lohia, Group Chief Executive Officer of IVL, said, “The margin pressure that the industry is inflicting on itself is unprecedented. The corrective action taken by industry players and governments in key chemical markets such as China, South Korea, Brazil, and Europe, is underway but needs to gather urgent momentum to restore a healthy balance between supply and demand over the next 12-24 months. Hopefully, there is delayed consumption in the same way we saw for travel after the Covid epidemic. Europe in particular has been plagued with structural issues, and an end to the Russia-Ukraine conflict will be the most defining upside trigger for the region, as well as the EU’s discussions on import regulations.”
In a sustained effort to counter the softer operating environment, IVL’s empowered leadership teams are focused on structural actions under IVL 2.0 to optimize the company’s leading business model, particularly in Europe which has borne the brunt of the industry headwinds. These measures include extracting savings, enhanced cash generation, digital adoption, and sustainability innovation. In the first nine months of 2025, operating cash flow stood at $985 million, with a healthy EBITDA conversion of 121%.
Site optimization actions, which included the sale of Wellman International in Ireland in 3Q, helped reduce fixed costs, rationalize capacity, and reposition the company’s leaner and more efficient portfolio in the changing landscape. Fixed-costs reduction in LTM 3Q25 was $130 million compared to the corresponding period in 2023 when IVL 2.0 was launched. Furthermore, the company expects to realize over $200 million in 2026 from the sale of land and properties of rationalized assets in Australia, Rotterdam and Canada.
On the measures taken under IVL 2.0, Mr. Lohia said, “I am proud of our teams in identifying and taking timely proactive self-help actions, which reflect a methodical approach to financial management and commercial excellence. By taking these measures now, we will be better positioned to capitalize when global trade and consumer demand adjust and realign to the emerging new era for our industry.”
“I believe we will see over the next 12-24 months a host of mergers and partnerships in the industry. Meantime, we are disciplined with our capital allocation by focusing on partnerships in high-growth projects, which brings expansion in accretive categories. We are at an advanced stage with various collaborations that would enhance our balance sheet and the quality of our earnings across all our business segments.”
Alongside efforts to extract savings and enhance working capital, the company is maintaining a prudent approach to capital allocation as net debt remains high relative to EBITDA in an environment of elevated interest rates. Commenting on Indorama Ventures’ shares, Mr. Lohia said, “Valuations are depressed for the industry as a whole. A firm’s stock price should reflect management’s readiness to emerge from troughs and adapt to industry shifts. This realignment is being shaped at Indorama Ventures but is not yet being recognized due to our continued high debt relative to EBITDA.”
1 Adjusted financials are before inventory gain/(loss) and extraordinary items.
