Polyolefins producer Borealis made a record net profit of 1.107 billion euros in 2016, which was a 10 percent increase on the 988 million euro profit it made in 2015.
Net sales, however, fell from 7.7 billion euros in 2015 to 7.218 billion in 2016. Total sales (including pro-rata sales at equity consolidated companies such as the Borouge joint venture in Abu Dhabi) also dropped from 9.026 billion euros to 8.768 billon.
Borealis said in its results announcement: “The improved result over 2016 was driven by overall stronger margins in the polyolefins business and an improved contribution from Borouge, following the successful completion of the Borouge 3 project. The contribution from Base Chemicals was lower compared to 2015 as a result of weak demand and low prices in the fertilizer business.”
The Austria-based group said that the Borouge 3 expansion plant in Ruwais, UAE has started making cross-linked polyethylene compounds based on Borealis' proprietary Borlink technology.
The next steps for Borouge include optimizing Borouge 1, 2 and 3 and building another polypropylene plant, dubbed PP5, it said. “Pending approval of the project in 2017, PP5 could be up and running by around 2020,” it said.
“Borouge will also focus on finding ways to create more value by stretching the oil barrel. For Borouge this means the cracking of naphtha and perhaps of other mixed feeds, and converting these to downstream products. Cracking could be done in a facility called ‘Borouge 4'. If the Borouge 4 project meets the approval of shareholders, it would be by far the most ambitious and challenging petrochemicals project that Borealis or [joint venture partner] ADNOC have ever undertaken.”
Mark Garrett, CEO at Borealis, said in the announcement: “2016 was a very strong year for Borealis of which all our people should be proud. Whilst we do not expect to repeat the 2016 result in 2017, we still expect 2017 to be a very solid year, with Borealis remaining in the top echelon of profitable companies.”