Borealis' new chief executive Alfred Stern says the company is looking to grow Borouge, its joint venture with Adnoc outside of Abu Dhabi. Reem Mohammed/The National
Borealis' new chief executive Alfred Stern says the company is looking to grow Borouge, its joint venture with Adnoc outside of Abu Dhabi. Reem Mohammed/The National
Borealis' new chief executive Alfred Stern says the company is looking to grow Borouge, its joint venture with Adnoc outside of Abu Dhabi. Reem Mohammed/The National
Borealis' new chief executive Alfred Stern says the company is looking to grow Borouge, its joint venture with Adnoc outside of Abu Dhabi. Reem Mohammed/The National

Exclusive: Borealis seeks partners for joint venture with Adnoc and investments abroad


Jennifer Gnana
  • English
  • Arabic

Petrochemicals producer Borealis is in talks to add more partners to the expanding Borouge chemicals facility in Abu Dhabi and is eyeing investment opportunities abroad with the Abu Dhabi National Oil Company.

Austrian company Borealis, which is majority-owned by Abu Dhabi strategic firm Mubadala Investment Company, operates the petchems joint venture Borouge with Adnoc in the capital’s western region of Ruwais.

"Borealis is so far the only technology supplier for the polyolefin plants (in Borouge) … and we also want to use [our technology] to build that further and that can also lead to opportunities outside of Abu Dhabi but also in Abu Dhabi to partner up with others [alongside] Adnoc," Borealis chief executive Alfred Stern told The National in an interview on Monday.

The Borouge facility, which has a production capacity of 4.5 million tonnes of polyethylene and polypropylene, is currently looking to ramp up production by almost three times through the development of new projects. These are Borouge 4 and polypropylene plant-5 that will integrated with the expanding refinery in Ruwais. Polypropylene and polyethylene fall under the larger category of polyolefins, which includes plastics manufactured through a process known as polymerisation.

The strategy to more than triple chemicals output comes in parallel with efforts by Adnoc, which produces 4.5 per cent of global oil, to build the world’s biggest integrated refining and petchems facility at Ruwais.

Adnoc, which expects to invest around $45 billion (Dh165.3bn) downstream with partners over the next five years in Abu Dhabi, also signed its first international partnership with Saudi Aramco in June to develop an integrated refining and chemicals complex in the west coast of India.

Borealis sees an extension of its ongoing partnership with Adnoc in Borouge to possibly include a role in the development of the $55bn Ratnagiri facility in the Indian state of Maharashtra.

“There will be some side products coming out of the refinery that create opportunities for petrochemical production and for sure Adnoc will explore together with us as this is an opportunity we can grow Borouge further outside of Abu Dhabi,” said Mr Stern.

Borealis and Nova Chemicals, also a Mubadala entity,
are jointly investing in the
development of a Total-led chemicals complex on the US Gulf Coast.

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The chemicals company counts the US Gulf coast and the Central Asian oil producer Kazakhstan, where the downstream sector remains fairly nascent, as new markets for expansion, particularly with the wide availability of feed stock in both countries. 

“We want to explore if we can make that work together with UCC [United Chemical Company] in Kazakhstan, which will be a very exciting opportunity,” said Mr Stern.

Borealis and the Kazakh chemicals company signed a joint development agreement in March to develop a large-scale polyethylene project, one of the biggest downstream ventures for the country

Borealis, which is currently undertaking pre-front end engineering and design on developing what could be the world’s largest mixed feed cracker at Ruwais, will look at a mixture of liquids and gases to be used as feedstock in its new units at Borouge 4. 

Borealis' products will see both strong demand in the domestic sector, particularly in synergy with Adnoc's planned derivatives and conversions park, which is set to develop on the back of the expanded refining facilities in Ruwais. 

“That would be a strong driver to grow for Borouge in this region even more than we see today,” said Mr Stern. 

He foresees additional growth opportunities for export as well. Asia and the Middle East have the highest growth rates for polyolefins and the markets account for the largest chunk of Borealis' products, particularly in servicing energy and infrastructure sectors, due to the growing need for cabling and insulation in those
geographies.
 

“We see China, South East Asia as huge growth regions, but also the Middle East here will continue to grow. This was one of the big things we implemented in Borouge 3, with our Borlink technology in order to bring this wire and cable insulation material we are ramping [that] up rapidly now,” said Mr Stern.

Other big revenue growth segments are parts for the automotive industry, fuelled by the uptake in electric cars and growth in mobility across Asia as well as the Middle East.

Borealis through its joint venture Borouge recently expanded its existing compounding facility in Shanghai to manufacture additives for vehicles.

Day 1, Dubai Test: At a glance

Moment of the day Sadeera Samarawickrama set pulses racing with his strokeplay on his introduction to Test cricket. It reached a feverish peak when he stepped down the wicket and launched Yasir Shah, who many regard as the world’s leading spinner, back over his head for six. No matter that he was out soon after: it felt as though the future had arrived.

Stat of the day - 5 The last time Sri Lanka played a Test in Dubai – they won here in 2013 – they had four players in their XI who were known as wicketkeepers. This time they have gone one better. Each of Dinesh Chandimal, Kaushal Silva, Samarawickrama, Kusal Mendis, and Niroshan Dickwella – the nominated gloveman here – can keep wicket.

The verdict Sri Lanka want to make history by becoming the first team to beat Pakistan in a full Test series in the UAE. They could not have made a better start, first by winning the toss, then by scoring freely on an easy-paced pitch. The fact Yasir Shah found some turn on Day 1, too, will have interested their own spin bowlers.

The National's picks

4.35pm: Tilal Al Khalediah
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6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
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Retirement funds heavily invested in equities at a risky time

Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, just at a time when trade tensions threaten to derail markets.

Retirement money managers in 14 geographies now allocate 40 per cent of their assets to equities, an 8 percentage-point climb over the past five years, according to a Mercer survey released last week that canvassed government, corporate and mandatory pension funds with almost $5 trillion in assets under management. That compares with about 25 per cent for pension funds in Europe.

The escalating trade spat between the US and China has heightened fears that stocks are ripe for a downturn. With tensions mounting and outcomes driven more by politics than economics, the S&P 500 Index will be on course for a “full-scale bear market” without Federal Reserve interest-rate cuts, Citigroup’s global macro strategy team said earlier this week.

The increased allocation to equities by growth-market pension funds has come at the expense of fixed-income investments, which declined 11 percentage points over the five years, according to the survey.

Hong Kong funds have the highest exposure to equities at 66 per cent, although that’s been relatively stable over the period. Japan’s equity allocation jumped 13 percentage points while South Korea’s increased 8 percentage points.

The money managers are also directing a higher portion of their funds to assets outside of their home countries. On average, foreign stocks now account for 49 per cent of respondents’ equity investments, 4 percentage points higher than five years ago, while foreign fixed-income exposure climbed 7 percentage points to 23 per cent. Funds in Japan, South Korea, Malaysia and Taiwan are among those seeking greater diversification in stocks and fixed income.

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All ties are to be played the week commencing December 21.

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