InterviewBorouge upbeat on long term prospects of polyolefins

21 April 2010 03:56  [Source: ICIS news]

By Prema Viswanathan

Borouge site in Ruwais, Abu Dhabi, UAESHANGHAI (ICIS news)-The market outlook for polyolefins is very positive in the long term, but there could be some ups and downs in the short term, William Yau, chief executive officer (CEO) for Borouge's marketing arm, said on Wednesday.

“Last year, people were uncertain about what the long term market outlook would be. But the situation looks very positive now. Just look at the mood at ChinaPlas,” said Yau on the sidelines of the Chinaplas exhibition 2010 in Shanghai.

Chinaplas – Asia’s largest annual plastics event – runs from 19-22 April.

But in the short term, although demand and supply were normal, there could be ups and downs, he admitted. “Overall, we are cautiously optimistic,” he said in an interview with ICIS news.

The company was lucky to have a presence in high growth markets such as China and India, and to have a production base in the Middle East, where it enjoys a feedstock advantage, Yau said.

“The Borouge strategy has always been to look at the long term. And when we look at the specific segments we are serving, we see much more stability, the market is growing,” he said.

General applications, film and moulding, advanced packaging, wire and cable, pipes for infrastructure projects, the automotive segment – all these were seeing significant growth in demand, he said.

“Last year in China the automotive market grew by 30-40% and this year in the first quarter in double digits, both for exports and domestic consumption. This is happening in India too,” said Yau.

The growth in segments such as automobiles was driving the demand for value added products, which was the focus area for Borouge, he added.

The inauguration of Borouge’s 50,000 tonne/year compounding plant in Shanghai on Tuesday, was in line with this focus, said Yau.

“We could increase the capacity to 80,000 tonnes/year in the near future. And we are also looking at new investments linked to the automotive industry in China and in India,” said Yau.

Getting closer to the market by building compounding plants and logistics hubs in key markets like China, India and southeast Asia was an important element in Borouge’s customer-focussed strategy, said Yau.

“At the moment, we are fine tuning Borouge II production. We can adjust our production according to the needs of customers,” he said.

The new complex would start up in mid-2010, but the full polyolefins output of 2m tonnes/year was likely to be achieved only by the end of the year or early next year, he said.

The Borouge III project was also proceeding on track, he said.

“It is currently in the FEED (front end engineering and design) phase. We are still looking at the product range, analysing product, market, technology.

“It is not a question of just designing production, we have to look at marketing and sales. By 2013-14, We will have 4.5m tonnes of product coming out. So we have to build up an additional supply chain, build more hubs,” he added.

Borouge is a joint venture between the Abu Dhabi National Oil Co and Austria’s Borealis.

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By: Prema Viswanathan
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