GPCA ’09: Borealis plant start-ups to weigh on its 2010 financials

10 December 2009 16:05  [Source: ICIS news]

DUBAI (ICIS news)--Austria-based Borealis expects the start-up of its major projects in Sweden and the United Arab Emirates to weigh on its financial performance next year, although global demand for polyolefins would start to normalise, CEO Mark Garrett said on Thursday.

“2010 would be difficult for us,” Garrett said in an interview, but he expected the polyolefins market to grow at around 3.0-4.0% after experiencing a contraction this year.

“Those two big start-ups will bring with them a lot of depreciation costs. If we were running normal, we would expect it to be a better year than 2009,” he said.

Garrett was referring to Borealis’ 350,000 tonne/year low density polyethylene (LDPE) plant in Stenungsund, Sweden, and the company’s Borouge 2 project in Ruwais, Abu Dhabi, which would come on stream in the middle of 2010.

For Borouge 2, excess ethylene from the 1.5m tonne/year cracker could be temporarily diverted to the spot market for exports while the downstream plants have yet to start up, Garrett said.

The company currently implements restrictive capital spending, focusing on investments on the two plants and the new innovation centre in Austria “because those three things are our future,” Garrett said.

Borealis’ actual financials so far this year “are not too bad” compared to expectations in the early part of 2009 after the company incurred a €72m ($106m) operating loss in the first quarter, Garrett said.

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By: Pearl Bantillo
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