European polyolefins maker Borealis A/S is firing up its Borouge joint venture in the Middle East.
The project - a 50-50 venture between Borealis and Abu Dhabi National Oil Co. - will have 1.3 billion pounds of polyethylene capacity by mid-2005, Borealis Chief Executive Officer John Taylor said at an Oct. 20 news conference at K 2004 in Dusseldorf. The site - located in Ruwais, United Arab Emirates - opened in 2001 with about 500 million pounds of annual PE capacity. It also produces about 1.3 billion pounds of ethylene each year.
Taylor said 60 percent of the Borouge site's output is being sold into ``differentiated products'' such as pipe, film and cable jacketing.
Borealis, based in Lyngby, Denmark, also will open a 770 million-pound-capacity PE plant in Austria in late 2005, replacing an older PE plant that was shut down recently. Polyolefin capacity in Norway also will be expanded, while a second polypropylene plant for the German market - with almost 730 million pounds of annual capacity - is being considered for a 2007 or 2008 launch.
The projects should help Borealis maintain its position as Europe's third-largest PE maker and second-largest PP producer.
``If you take a global perspective, we've made progress during the year,'' said David Rolph, executive vice president of polyolefins.
``Our trade flows have been moving toward the Middle East and to China, where demand is almost insatiable.
``But at the same time, costs have been going up, so we've had to work with our customers to increase prices.''
Borealis' sales for the first nine months of 2004 were up almost 19 percent, to 3.3 billion euros ($4.4 billion) while the firm showed a profit of 123 million euros ($162 million). Borealis had lost 19 million euros ($25 million) in the same period a year ago.
The company also has remained aggressive on the new product front. Recent advancements include:
* Borpact-brand PP for transparency and low temperature impact in deep-freeze display packaging, including ice cream.
* Borcom-brand PP for weight savings in appliances and interior automotive applications.
* Random copolymer PP for hot and cold water pipe systems.
* Borstar-brand enhanced PE for film used in undercover crop cultivation.
On the film market, Rolph said consolidation among Borealis' customer base has built ``critical mass and marketing confidence,'' but has not had much impact on the market's overall competitiveness, which remains high.
``Consolidation will continue in that market, which will make the retail environment even more difficult,'' he said.
The firm also trumpeted use of its products in a pair of major development projects in the Middle East. Borstar PE is being used in a major water pipeline in Pakistan, while Borcoat PE coatings have been selected for a crude-oil pipeline in Turkey.
Globally, Borealis employs about 5,000 in more than a dozen countries and produces more than 7 billion pounds of polyolefins a year. Its only North American site is a compounding plant in Rockport, N.J.
Borealis formed in 1994 and is a 50-50 joint venture between Statoil, the Norwegian national oil company, and IOB Holdings, a group made up of energy investors from Austria and United Arab Emirates.
