Borealis profits flat amid growth spurt

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Austrian chemicals company Borealis AG’s net profit slipped 1% to €1.09bn in the year 2017, despite stronger sales compared to 2016.

Sales grew 4.7% at €7.56bn during the year, as the company announced significant global growth projects and the completion of a record number of turnarounds.

The supplier of polyolefins said the 2017 result, which was generally on a par with the previous year, was driven by “healthy” European integrated polyolefin margins and an improved profit contribution from Borouge, its 50:50 JV with Abu Dhabi National Oil Company (ADNOC).

In the chemicals segment, however, the company underperformed compared to 2016 as a result of a continued weak fertiliser business environment.

High investment levels and turnarounds led to an increase of company’s net debt by €140m, Borealis said.

“With upcoming significant global capacity expansions, we expect some softening of polyolefin prices in Europe but believe that improved performance in fertilisers will compensate the price pressure in polyolefins,” said Mark Garrett, Borealis chief executive. 

During 2017, ADNOC and Borealis announced a framework agreement on two key projects.

The two companies moved to the pre-FEED phase for the construction of the Borouge 4 complex, which is slated to come on stream around 2023.

Borouge 4 encompasses a “world-scale” mixed feedstock cracker, using existing feedstock available in Abu Dhabi and downstream derivatives units for both polyolefin and non-polyolefin products.

Simultaneously, the companies started engineering, procurement & construction (EPC) tendering for an additional polypropylene plant (PP5) based on Borealis proprietary Borstar technology.

The plant, to be integrated with the Borouge 3 complex, will add value to the surplus propylene available from ADNOC Refining’s new propane dehydrogenation (PDH) unit, producing around 500 kilotonnes per annum of polypropylene.

On the product side, Borealis and Borouge announced the launch of Anteo, a new family of linear low density polyethylene (LLDPE) packaging grades for the global market.

Outside its Borouge activities, Borealis signed a preliminary agreement with NOVA Chemicals Corp to form a JV with Total Petrochemicals and Refining USA.

The JV will build and own a new light feed cracker and a new Borstar polyethylene (PE) facility in Bayport, Texas. It will also include Total’s existing Bayport PE facility.

In addition, Borealis announced its decision to build a dedicated automotive polypropylene (PP) compounding plant in Taylorsville, Alexander County, North Carolina.

In September, Borealis announced the FEED-phase for a new, “world-scale” propane dehydrogenation (PDH) plant, which is planned to be located at the existing Borealis production site in Kallo, Belgium.

The final investment decision for the additional unit is expected to be made in the third quarter of 2018, with potential start-up of the plant scheduled for the second half of 2021.

Additionally, in November, Borealis announced that it will study the feasibility of significantly expanding the capacity of its polypropylene (PP) plants in Europe.

The study will assess a series of capacity increases through the debottlenecking of existing European PP assets, initially targeting the three PP plants Borealis is operating in Belgium.

The company expects to make a final decision on the investment in the fourth quarter of this year, with capacity increases coming on stream from first quarter of 2020 to early 2022.

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