13 March 2008 17:31 [Source: ICIS news]
LONDON (ICIS news)--Vienna-based polyolefins producer Borealis aims to be a significantly more profitable company in five years’ time, said CEO Mark Garett on Thursday.
The company planned to continue its “value creation through innovation” strategy and would build on significant new low-cost feedstock capacity increases in ?xml:namespace>
The CEO’s announcements come in the wake of a 74% fall in fourth-quarter operating profits, announced on Wednesday, though its earnings for the whole of 2007 were 28% higher year on year.
The Borouge joint venture in which the company has a 40% stake was adding 2.1m tonnes of polyolefins capacity, due on stream in 2010, which Garrett said would produce significant cash flows.
Borealis would see profits from the venture flow directly to its bottom line, he added.
The new Borealis CEO - he took over in January - said that scrap and build with incremental capacity underpinned the strategy for
“You might see a Borealis that has a similar sales line but a very different profits line [in a few years],” he said.
“We have to continue to support the significant investment in
Borealis expected increased market volatility in
It brought a 330,000 tonne/year Borstar technology PP plant on stream in Burghausen
In its base chemicals business it has lifted phenol and other product capacities in
“Productivity gains are endless,” he added, with projects at the local and group-wide level.
The considerable need for infrastructure replacement in western Europe and new demand in eastern Europe would help drive demand for Borealis products in segments like wire and cable, he said.
Borealis makes much of the fact that it produces more specialised polypropylene (PP) and PE products, although less than 50% of its turnover is derived from these more performance-oriented materials.
Garrett stressed, however, that the Borealis wire and cable offering was all about purity in production and compounding.
The polymers are produced “almost in clean room conditions”, he said. This is especially important for materials used in high voltage conditions, he added.
PP continued to replace polycarbonate in automotive applications, he said, adding that in pipe it was a question of making sure the standards are maintained.
“I think Borealis’ reputation for product quality combined with our ability to bring new products to the market through our [research and development] R&D centres is the story,” he said.
Garrett said he expected the significant new capacity additions at Ruwais in
Borouge was using, as yet, not fully proven dimerisation technology to produce propylene feedstock for the 500,000 PP plant planned in Ruwais. The technology, however, was being tested in a pilot scale unit in
The personnel on the Schwechat unit would transfer to
Borealis is still developing its strategy for its new base chemicals businesses that comprise the firm’s cracker-based operations, phenol and acetone, melamine and plant nutrients lines. A six-quarter “transformation” programme is designed to help integration and lift profitability.
In June last year, Borealis raised phenol capacity at its plant in
Phenol is tight in
Garrett said he believed that one of the keys for the market was that phenol should no longer be priced the traditional way and that the link to feedstock benzene may no longer be logical.
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