GOTEBORG, SWEDEN — Borealis A/S Chief Executive Officer Svein Rennemo was supposed to give an overview of the Nordic plastics industry Sept. 14 when he was the keynote speaker for Plastics Pipes X, a trade and technical conference in Goteborg.
But during his presentation it became increasingly clear that he really was talking about the global plastics industry.
While noting that polyolefins like those Borealis produces have maintained a strong market in its home base of Denmark, Finland, Norway and Sweden, Rennemo said his company's future markets are ``very much in Europe and beyond.''
To take companies forward requires partners, Rennemo said, because scale is an important factor in success.
``We believe that global alliances increasingly will be the wave of the future,'' he said.
Borealis estimates the top European resin producers churned out between 1 million and 2 million metric tons of polyolefins each in 1985. By 2005, that figure will jump between 8 million and 10 million, Rennemo said.
``Some of that increase comes from market growth, but mostly from concentration of industry,'' he said.
Rennemo said most mergers occur because each of the parties realizes ``We are too small to remain alone.''
Larger suppliers can ``dedicate plants and sales forces to individual products, increasing efficiency and competence,'' Rennemo said.
Borealis came to light in 1993 as one of those alliances. The company began as a joint venture between Neste Oy of Finland and Statoil AB of Norway. It was an early example of the global trend toward consolidation of resin suppliers, Rennemo said.
``We are now one of the market leaders,'' he said.
The shrinking number of suppliers means processors will not have as many choices when buying resins, but that's not necessarily a bad thing, Rennemo said.
``Leading companies will accelerate the development of technology,'' he said.
They also can work with processors to bring new ideas to market.
Growing populations, especially in urban areas, will fuel the need for more plastic products, Rennemo said.
But he noted population growth also will require development of earth-friendly technologies.
``We are not there yet,'' he said.
To get there, resin producers have to create new technology faster, and at a lower cost, Rennemo said.
``Winners'' in the future resin supply game will drive restructuring of the industry, work increasingly through partnerships and develop leading technology,'' Rennemo said.
``Obviously at Borealis, we intend to be one of the winners,'' he said.