Polyolefins oversupply will not hit Borealis - CEO

08 August 2007 14:47  [Source: ICIS news]

LONDON (ICIS news)--Borealis CEO John Taylor said on Wednesday he was not overly concerned with potential oversupply following large amounts of polyolefins capacity starting up in the Middle East in the next five years.

 

New projects in the region tended to get delayed, said Taylor but added that there was potential for oversupply if all the crackers came on stream as planned.

 

“Our Middle East projects are long term-investments - 40 to 50 year decisions,” he said. “The market segments we focus on are less susceptible to commodity swings.”

The plastics manufacturer's joint-venture expansion project with Abu Dhabi National Oil Company (Adnoc), Borouge 2, is set to come on stream in 2010, tripling the Ruwais, Abu Dhabi-based complex’s annual production capacity to 2m tonnes of polyolefins, including for the first time, polypropylene (PP). 
 
Over 14m tonnes/year of new capacity is expected to start up in Saudi Arabia by 2015, with the Middle East on course to double its share of polyethylene and polypropylene output by 2011.

 

Borealis highlighted a strategy providing for the large demand potential of plastic pipes and cables, especially in developing economies like China and India.
 
India’s development would be synonymous with demand for pipes to provide clean water and plastic packaging to preserve food as the country’s lifestyle changes, according to the company.
 
Possible oversupply from the Middle Eastern production area would depend particularly on growth in the Chinese market, which was difficult to predict, said Taylor.

Asia plastics demand was expected to increase 10-12% annually and the Middle East by 6-7%, said the company.

 

Borealis is a joint subsidiary of Austria's OMV and Abu Dhabi's International Petroleum Investment Company (IPIC).

By: Mark Watts
+44 20 8652 3214

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