UAE’s Borouge at full capacity on healthy global demand – Borealis’ CEO

Jonathan Lopez

20-Oct-2016

(recasts first paragraph for clarity)

Interview article by Jonathan Lopez

Mark Garrett Oct 16LONDON (ICIS)–Healthy global demand for polyethylene (PE) and polypropylene (PP) is helping UAE’s Abu Dhabi petrochemical complex of Borouge to run at full capacity after all plants within it have started up, the CEO of joint-owner Austrian chemical major Borealis said on Thursday.

Mark Garrett added that despite China’s industrial slowdown, demand for polymers to manufacture wires and cables – directed to the transportation and construction industries – remains healthy in the country, a market Borealis is tapping into, he said in a phone interview from Dusseldorf, Germany, where he was taking part in the plastics K Fair.

Due to the start up of several plants at the beginning of this year at the major petrochemical complex of Borouge, which is co-owned by Abu Dhabi National Oil Company (ADNOC), full capacity of 4.5m tonnes/year for production of polymers will only be realised in 2017, said Garrett.

Borealis is privately owned by Abu Dhabi’s International Petroleum Investment Company (IPIC), with a 64% stake, and Austrian energy major OMV (36% stake).

According to Borouge’s website, the 4.5m tonne/year production capacity is divided into 2.3m tonnes/year of PE, 1.8 tonnes/year of PP and 350,000 tonnes/year of low density polyethylene (LDPE), supporting cross-linked polyethylene (XLPE).

Following the disruption of feedstock deliveries in February to Borouge, causing one of the three 1.5m tonne/year steam crackers to be offline for the whole month, Garrett highlighted how the interconnection between supplier Gasco and producer is now “functioning” well and they are achieving good performance rates at the plants.

“At Borouge, all plants are operating well, running at full capacity and feedstock is available. The system between ADNOC, Gasco and Borouge is now functioning and we seeing a good volume performance. All plants have passed the performance tests and we have proven the ability to run a 4.5m tonne/year facility like this,” he said.

Although Garrett would not go into detail about where the materials produced at Borouge are being sold, he said the company’s reach intends to be global but could not comment on suggestions by sources in the Middle East polymers market that Borouge was trying to compete in east Africa with lower offers than its competitors.

He welcomed management changes at partner ADNOC, including new CEO Ahmed Al Jaber, pointing out that the reshuffle could help improve productivity at the firm and therefore at its 50%-owned Borouge, as “any improvement in efficiency is a bonus” for the company’s partners, he said.

“There have been numerous announcements [about management changes] and they have merged various companies within ADNOC, improving at the same time productivity and efficiency. Our [Borealis’] cooperation with them is excellent,” said Garrett.

“There is always room to improve productivity. Every company on the planet can improve productively and efficiency, especially with changing technology.”

Following the coup d’etat on 15 July in Turkey, Garrett said Borealis’ operations in the country continue to be running normally and said it would be “wise” for him not to comment on the political developments since that day.

Turkish President Recep Tayyip Erdogan started soon after crushing the coup a crackdown on what he described as followers of a radical islamist organisation. However, the extent of the purge in the police – but also academia and the civil service – has worried human rights observers, who have asked Erdogan to stop the crackdown.

“The coup was obviously a surprise to be honest. But as of now, Borealis’ country manager there tells me they are managing to do business without having noticed too many changes,” said Garrett.

“However, the political troubles have maybe reduced demand a little bit but we [Borealis and Borouge] still view Turkey as a place where we want to do business – it is a growing market and there will be growing demand for our products as standards of living improve.”

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