Having over-delivered on its targets by 21 per cent in 2020, Indorama Ventres (IVL) has made progress as planned in FY 21,Q1. The program has made $67million profit this quarter, split evenly between business-led initiatives and cost transformations. Positive global sentiment, underscored by rebounding global oil prices and vaccine rollouts, has resulted in strong volume demand and strong margins for all IVL’s key products, driven at first by recovery in China and carrying forward into the second quarter.
The company’s global inventory levels are tight and combined with supply chain shocks are leading to margin increase in all commodity products, supporting the increase in crude oil prices. The rise in crude prices has also brought with it improvement in the shale gas advantage, benefiting IVL’s IOD (Integrated Oxides and Derivatives) business segment in North America. All of this is translating into stronger than anticipated earnings in first half 2021.
IVL remains focused and committed to the various transformation programs that it embarked on in 2020. The company is making good progress on its journey towards one ERP, strengthening data platforms and digital tools that will allow the company to improve management. Better business analytics will improve discipline in areas such as exposure management, a crucial aspect given the complex nature of today’s markets. Additionally, IVL has created centralized expert enabling functions in areas such as Digital and Business Continuity to provide best-in-class support to its business segments.