InterviewBorouge prepares for start of new PO complex in mid-2010

03 August 2009 08:41  [Source: ICIS news]

By Malini Hariharan

MUMBAI (ICIS news)--Borogue is building a front line sales force and logistics hubs to handle volumes from its new polyolefins (PO) complex, which is on track for start up in June 2010, a senior company executive said over the weekend.

The company’s 1.5m tonnes/year cracker, 540,000 tonnes/year polyethylene and 800,000,000 tonnes/year polypropylene (PP) Borouge 2 project at Ruwais, Abu Dhabi, is about 80% complete and the company expects to start shipping products from mid-2010.

“We are on track,” William Yau, ceo of Borouge’s marketing arm, told ICIS news.

Yau added that his current focus was on getting people on the ground and close to customers to market products from Borouge 2.

The company is setting up logistic hubs in Guangzhou, Shanghai and Singapore to handle 246,000 tonnes/year, 600,000 tonnes/year and 330,000 tonnes/year of products respectively.

It also recently awarded a five-year contract to Gulftainer to provide on-site logistics services at Ruwais.

It was building a 50,000 tonnes/year compounding unit in China which will be ready for operation by mid-2010. The unit will meet the requirements of the automobile sector. In India, Borouge has entered into a toll manufacturing arrangement with Machino Polymers to meet demand from the auto sector.

Despite delays in the start up of many projects that had been scheduled for 2009-09, Yau maintained that the timing of Borouge 2 was good. The global economic situation would improve next year, he said. And he saw continuing demand growth in the key Indian and Chinese market.

“I have been talking to customers in India and they want product earlier,” he said.

On the current polyolefin (PO) market situation, Yau observed that in the last 6-9 months the traditional wisdom of linking oil prices to demand had not worked.

“We have to follow the market price. But we are concentrating on value-added applications which have higher stability; we can plan a little better,” he said referring to Borouge’s strategy.

Yau pointed out that the auto and appliances sectors in China were doing well thanks to government support. “We clearly see drop in export demand but domestic demand is doing well and that compensates,” he said.

Besides the Borouge II project, the company had also started preparing for volumes that would come from its Borouge III project, also at Ruwais.

“We are looking at the whole production, marketing and distribution footprint and putting the whole thing in strategic perspective. Where should we put our resources? What should be the long-term strategy? This is a major project and we are looking really long term – 10-15 years ahead,” said Yau.

The project, which includes a 1.5m tonnes/year ethane cracker and plants for PE and PP, is in the front end engineering and design (FEED) phase and is scheduled for completion at end-2013.

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By: Malini Hariharan
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