InterviewGPCA ’10: Borouge eyes north China for sales growth

08 December 2010 06:58  [Source: ICIS news]

By Prema Viswanathan

DUBAI (ICIS)--Borouge is looking at penetrating the largely untapped northern China region to grow its sales, an executive at the company’s marketing arm said on Wednesday

"With our distribution hubs and compounding plants in Shanghai and Guangzhou, we will be in a strong position to service the eastern and southern China markets…We now need to look at the northern part of the country, which has huge potential for growth," Borouge Pte Ltd CEO William Yau told ICIS in an interview.

Yau was in Dubai for the three-day 5th Gulf Petrochemicals and Chemicals Association (GPCA) forum that will run upto 9 December.

Beijing – China’s capital; Dalian – a major logistics centre; and Changchun, which has the largest automotive industry in China, are all in the northern regions.

Meanwhile, Borouge is enhancing its presence in southern China, having just bought a plot of land in Guangzhou province on which to build a new polymer plant, said Yau.

The company was planning to build a 100,000 tonne/year polypropylene (PP) compounding plant at the site, he said.

"We expect the plant to start up by 2012 and complement the downstream support we are providing through the existing compounding plant in Shanghai," Yau said.

The Shanghai plant is also likely to expand its capacity to 80,000 tonnes/year from 50,000 tonnes/year in 2011 to cater to the growing demand, mainly for applications in the automotive and household appliance sectors.

A similar strategy of establishing local presence in other key markets would be pursued, he said.

"We have to look long term so that we have our support system on the ground when Borouge III [at Ruwais in Abu Dhabi] starts up, bringing our polyolefins capacity to 4.5m tonnes/year by end 2013," he added.

Yau said that Borouge is expanding its sales and marketing presence in India.

"We now have 17 staff in our office in Mumbai and will soon be setting up a new office in Delhi," he said.

Compounding and distribution facilities were expected to follow later.

Borouge II, also at Ruwais, was operating well and the company was slowly ramping up capacity at the complex, Yau added.

"But we expect the full 2m tonne/year output only next year, although we have begun to produce and sell small volumes of the different polyethylene (PE) and PP grades already," he said.

Yau said he was "cautiously optimistic" about the market outlook for the coming year. "The fundamentals are still there. In key markets such as India and China, domestic demand continues to be strong," he said.

Borouge is a joint venture between the Abu Dhabi National Oil Company (ADNOC) and Austria’s Borealis.

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By: Prema Viswanathan
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