ANALYSIS OF AGREEMENT CONTAINING

CONSENT ORDER TO AID PUBLIC COMMENT

In the Matter of Corpus Christi Polymers LLC, Alfa, S.A.B. de C.V., Indorama Ventures Plc

Aloke Lohia and Suchitra Lohia, and Far Eastern New Century Corporation

File No. 181-0030, Docket No. C-xxxx

I. Introduction

The Federal Trade Commission (“Commission”) has accepted for public comment, 

subject to final approval, an Agreement Containing Consent Order (“Consent Agreement”) from 

Corpus Christi Polymers LLC (“CCP”); Alfa, S.A.B. de C.V. (“DAK”); Indorama Ventures Plc

(“Indorama”); Aloke Lohia and Suchitra Lohia; and Far Eastern New Century Corporation

(“FENC”) (collectively, the “Respondents”). CCP is a joint venture entity owned by corporate 

subsidiaries of DAK, Indorama, and FENC. The Consent Agreement would remedy the 

anticompetitive effects that likely would result from CCP’s proposed $1.1 billion acquisition of a

polyethylene terephthalate (“PET”) and purified terephthalic acid (“PTA”) facility, currently 

under construction in Corpus Christi, Texas (the “Transaction”). Upon completion, the plant will 

become the largest vertically integrated PTA-PET production facility in North America.

Absent a remedy, the Transaction would threaten to harm competition in the manufacture

and sale of PET. In particular, the Commission’s Complaint alleges that the Transaction, if 

consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and that 

the asset purchase agreement constitutes a violation of Section 5 of the Federal Trade 

Commission Act, as amended, 15 U.S.C. § 45, by substantially lessening competition in the 

manufacture and sale of PET in an area no greater than North America.

The Consent Agreement addresses the Commission’s concerns by, among other things, 

restricting DAK and Indorama’s ability to exercise control over CCP and by implementing 

mechanisms to prevent the flow of competitively sensitive information between and among the 

Respondents. Consistent with the Commission and the U.S. Department of Justice’s Antitrust 

Guidelines for Collaborations Among Competitors, the Consent Agreement also ensures that the 

agreement between DAK, Indorama, and FENC is no broader than reasonably necessary to 

achieve the procompetitive benefits of the CCP joint venture.

The Commission has placed the proposed Consent Agreement on the public record for 30 

days to solicit comments from interested persons. Comments received during this period will 

become part of the public record. After 30 days, the Commission will again review the proposed 

Consent Agreement and any comments received, and will decide whether it should withdraw 

from the Consent Agreement, modify it, or make it final.

II. The Respondents

Respondent Corpus Christi Polymers LLC is a limited liability company incorporated in 

Delaware with its principal place of business in Corpus Christi, Texas. CCP is a joint venture 

entity formed by the corporate subsidiaries of Respondents DAK, Indorama, and FENC. The 

joint venture members formed CCP to complete the construction of the Corpus Christi plant and 
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to act as a tolling manufacturer for the joint venture members. Each joint venture member will 

have the right to one-third of the Corpus Christi plant’s PTA and PET capacity, and each joint 

venture member will independently procure raw materials and independently sell and distribute 

the corresponding PTA and PET.

Respondent Alfa S.A.B. de C.V. is a holding company with headquarters in Monterrey, 

Mexico, and it operates in North America through its subsidiaries, Alpek, S.A.B. de C.V. and 

DAK Americas, LLC. It is the largest PET producer in North America by production capacity 

and operates four facilities in the United States, one facility in Mexico, and one facility in 

Canada. DAK also manufactures PTA, the primary input in producing PET, in North America.

Respondent Indorama Ventures Plc is a Thai company. Indorama, through its 

subsidiaries, owns and operates three PET production facilities in the United States and one 

facility in Mexico, making Indorama the second-largest North American PET producer by 

capacity. Indorama also manufactures PTA in North America.

Respondents Aloke Lohia and Suchitra Lohia are the ultimate parent entities of Indorama

for premerger notification purposes. Respondent Aloke Lohia is Executive Director, Vice 

Chairman of the Board, and Group Chief Executive Officer of Indorama. Respondent Suchitra 

Lohia is Executive Director and Chairperson of the Corporate Social Responsibility Committee 

of Indorama.

Respondent Far Eastern New Century Corporation is a corporation with headquarters in 

Taipei, Taiwan. FENC owns a PET plant in Apple Grove, West Virginia, which it acquired in 

early 2018. FENC is one of the largest polyester producers in the world. 

III. The Proposed Acquisition

M&G Chemicals S.A. (“M&G”) is an Italian-based global producer of PET. In July 

2011, M&G announced plans to build a new PET and PTA facility in Corpus Christi, Texas, the 

primary asset included in the Transaction. M&G began construction in April 2013. In the years 

that followed, cost overruns and construction problems delayed the project. During this time, 

DAK provided financing to M&G in exchange for a lien on the Corpus Christi plant and future 

rights to a substantial portion of the plant’s capacity.

In October 2017, M&G and eleven affiliates filed for Chapter 11 bankruptcy protection. 

The bankruptcy court established requirements for the sale of M&G’s assets and scheduled a

March 2018 auction for the Corpus Christi plant and other assets. M&G received three final bids 

for the Corpus Christi plant: a bid from CCP, which at the time was a two-firm joint venture 

between DAK and Indorama, a bid from FENC, and a bid from a subsidiary of Grupo Financiero 

Inbursa, S.A.B. de C.V., the plant’s largest lienholder. 

M&G had concerns that the bids from the DAK/Indorama joint venture and FENC did 

not comply with the bankruptcy court’s requirements. As the auction date approached, M&G 

consented to negotiations among the joint venture members to create a trilateral bid that would 

comply with the bankruptcy court’s requirements. The joint venture members ultimately agreed 
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to form a trilateral joint venture, and Respondent CCP submitted an approximately $1.1 billion

bid for the Corpus Christi plant and related assets, which the bankruptcy court approved as the 

winning bid on March 29, 2018.

IV. North American PET Market

The Commission’s Complaint alleges that a relevant product market in which to analyze 

the Transaction is the manufacture and sale of PET. PET is a plastic polymer primarily used to 

make plastic water and soda bottles and other packaging for consumer goods. Consumer goods 

manufacturers cannot switch to other products without incurring significant costs, as they have 

large investments in production lines that can only use PET as an input. Furthermore, in many 

applications, manufacturers and their customers disfavor potential substitutes such as glass, 

aluminum, and polypropylene, because these materials can be heavier, bulkier, and more 

expensive. Consumer goods manufacturing customers thus have no viable or economic 

substitute for PET.

The Commission’s Complaint also alleges that an area no greater than North America is a

relevant geographic market in which to analyze the effects of the Transaction. North American 

manufacturing customers prefer to purchase from North American suppliers due to simplified 

logistics, reduced supply chain risk, and quicker delivery times. Imported PET, which accounts 

for approximately 15% of North American sales, primarily serves customers located close to the 

coasts, and the Commission’s Complaint alleges that imports do not constrain prices throughout 

North America. Duties on imported PET have made many foreign PET sources uncompetitive 

even for North American customers who might otherwise have competitive freight logistics from 

coastal ports.

The North American PET market is highly concentrated. The joint venture members are 

three of only four North American PET producers, and together the three firms control nearly 90 

percent of North American PET capacity. The North American PTA market is also highly 

concentrated, with DAK and Indorama two of only three significant producers. Vertical 

integration into the PTA markets gives DAK and Indorama an advantage over other, nonintegrated PET producers. The market has high barriers to entry, including the significant time 

and cost of constructing a PET plant.

V. Effects of the Transaction

Without the proposed Consent Agreement, the Transaction would substantially lessen 

competition in the North American PET market by facilitating or increasing the likelihood of 

coordination between and among the joint venture members and by increasing the likelihood that 

the joint venture members, acting alone or in concert, would exercise market power. In addition, 

absent relief, the CCP joint venture lacks sufficient safeguards to prevent the joint venture 

members from using relationships occasioned by their joint ownership in CCP, and by the 

Transaction, to share competitively sensitive information beyond the minimum degree 

reasonably necessary to accomplish CCP’s legitimate objectives. 
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VI. The Proposed Consent Agreement

The proposed Consent Agreement remedies the Transaction’s anticompetitive effects by 

including a number of safeguards that limit DAK and Indorama’s control over CCP and that

prevent the flow of competitively sensitive information between and among the joint venture 

members. More fundamentally, the proposed Consent Agreement preserves the less 

concentrated market structure that resulted from CCP’s transformation from a two-firm to a 

three-firm joint venture, while also ensuring that CCP operates as an independent toll 

manufacturing plant. At the same time, the proposed Consent Agreement allows the joint 

venture members to bring to bear their expertise in building large PET and PTA facilities to 

efficiently complete construction of the Corpus Christi plant. 

The proposed Consent Agreement prohibits each joint venture member from owning 

more than a one-third equity interest in CCP and from owning tolling rights to more than onethird of the Corpus Christi plant’s PET and PTA capacity, without prior approval from the 

Commission. Pursuant to the terms of the revised CCP joint venture operating agreement, as

incorporated by reference into the proposed Consent Agreement, if a joint venture member fails 

to utilize the entirety of its one-third tolling rights in a given month, the other two joint venture 

members may use that capacity, without Commission approval. CCP will not share which joint 

venture member did not use its full capacity allotment. If no joint venture member claims the 

unused capacity, CCP must then market the capacity to third parties. The proposed Consent 

Agreement also ensures that any joint venture member can expand its capacity at the Corpus 

Christi plant without the approval of the other joint venture members. These provisions resolve 

concerns that Respondents might individually or cooperatively suppress output anticompetitively 

at the Corpus Christi plant.

The proposed Consent Agreement also includes safeguards against the improper sharing 

of competitively sensitive information between and among the joint venture members. The 

proposed Consent Agreement prohibits the joint venture members from receiving, sharing, or 

using any confidential information regarding CCP, with limited exceptions for reporting 

obligations and other operational necessities. The joint venture members must periodically 

provide a log to the Commission that identifies and describes all communications with any other 

joint venture member relating to the operation and management of Respondent CCP. The 

proposed Consent Agreement also prohibits the joint venture member from directly or indirectly 

influencing members of CCP’s board of managers, subject to limited exceptions defined in 

CCP’s revised joint venture operating agreement. Finally, the proposed Consent Agreement 

limits the joint venture members’ ability to hire former CCP independent board members and 

prohibits the joint venture members from soliciting or recruiting CCP employees. The joint 

venture members cannot hire former CCP employees for positions involving PET or PTA sales, 

marketing, or production decisions in the relevant market, for a period of one year. 

To ensure the effectiveness of this relief, the proposed Consent Agreement requires the 

Commission’s prior approval before the Respondents may make substantive governance or 

operating changes to CCP’s revised joint venture operating agreement. Because a Respondent’s 

future acquisition of any interest in a North American PET or PTA production facility would 
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likely raise competition concerns, the proposed Consent Agreement requires that the 

Respondents provide the Commission prior notice of any such acquisition. 

Consistent with the anticipated longevity of the Corpus Christi plant and the need for a 

remedy to continue throughout the CCP undertaking, the term of the proposed Consent 

Agreement is twenty years. The Commission has appointed Jeffrey Brennan of McDermott Will 

& Emery as a monitor to oversee the Respondents’ compliance with the provisions in the 

proposed Consent Agreement. The Respondents must also submit detailed compliance reports

that, among other things, identify and describe any instances in which a joint venture member

used less than one-third of the Corpus Christi plant’s PET or PTA capacity, asked for a change in 

grade of PET produced at the Corpus Christi plant, or requested an expansion of PET, PTA, or 

other feedstock capacity at the Corpus Christi plant.

The purpose of this analysis is to facilitate public comment on the proposed Consent 

Agreement, and the Commission does not intend this analysis to constitute an official 

interpretation of the proposed Consent Agreement or to modify its terms in any way.