Borouge to mould its own future
Borouge, the Abu Dhabi chemicals enterprise that makes plastics from natural gas, is developing its own research and development (R&D) capabilities after decades of relying on its European partner. The joint venture between Abu Dhabi National Oil Company (ADNOC) and the Vienna-based chemicals producer Borealis is preparing the ground for an "innovation centre" in the capital, which should be finished by the end of next year.
"This will be a new function in Borouge," said Dr Petri Lehmus, who has been seconded to the company from Borealis to head the initiative. "It will be our first R&D centre. We have laboratories for quality control, but so far innovation was done by Borealis." Borouge wants to develop its own R&D because it has undertaken a huge expansion that is expected to turn the company by 2014 into a major international exporter of polythene and polypropylene plastics. Its annual production capacity is expected to increase almost sevenfold to 4 million tonnes of plastic from about 600,000 tonnes last year. That would match the output of Borealis, itself a joint venture between the Austrian petroleum group OMV and the Abu Dhabi Government-owned International Petroleum Investment Company.
"Our mission is value creation through innovation, so we need to start taking more responsibility at Borouge," said Dr Lehmus. Having its own R&D capabilities will enable the firm to focus on developing products tailored to the requirements of its overseas customers, which are mostly in China and other Asia Pacific countries, and to the growing domestic and regional market for plastics. Borouge, which exports plastic pellets as a bulk commodity, will not necessarily make speciality plastics itself. Instead, it is aiming to develop recipes for overseas clients operating compounding facilities.
Last month, Borouge opened one such plant in Shanghai. The US$70 million (Dh257.1m) facility makes plastics used in cars and household appliances such as refrigerators. Borouge's innovation centre will focus on developing long-life plastics that vehicle and white goods makers particularly need. Other potential applications are in advanced food packaging, plastic pipes and cable coatings, Dr Lehmus said.
"The pipe, wire and cable industries are very big markets for us in the Middle East and also in China and India," he said. It helps that Borealis is also a leader in supplying plastics to those sectors. Borouge's innovation centre will be located near the southern tip of Abu Dhabi island, across the street from the Petroleum Institute, which ADNOC founded. The two affiliates are hoping for cross pollination between their respective institutes and that some of the Emirati engineers and materials scientists graduating from the institute will be among the first home-grown polymer experts employed by Borouge.
During an initial development phase, Borouge plans to hire about 55 technical staff to work at its innovation centre, but could later expand that to between 80 and 100 polymer scientists and engineers. The company has set up five scholarship agreements with universities in China and India to gain access to the expertise it will need. That is an important consideration, as the petroleum sector and related industries worldwide face an acute shortage of qualified technical talent.
"Manpower and human resources are a very big challenge for us," Abdullah al Attiyah, the energy minister of Qatar, said last week at an energy forum in Doha. For the UAE market, Borouge hopes to develop new products at its innovation centre especially suited to hot climates. As a native of Finland who has worked on the opposite problem - developing plastic products to function under conditions typical of the inside of refrigerators - Dr Lehmus understands that climate makes a difference.
Published: May 22, 2010 04:00 AM