Borealis's announcement comes on the heels of ones from other plastics suppliers including Dow, BASF and ExxonMobil, all of which last week announced their own positive results and indications that demand—in automotive, consumer products and even B&C—was improving.
According to Borealis, feedstock prices and polyolefin market prices continue to increase. Due to this as well as some delays in expansion projects in the Middle East, which have limited additional capacity from reaching market, industry margins improved during the first quarter of 2010. Borealis' positive result was also driven by an increase in sales of value added products within the company's portfolio.
Earlier this year Borealis closed its high-density polyethylene plant in Beringen, Belgium. The company is soon to open a new 350,000-tonnes/yr LDPE plant in Stenungsund, Sweden. In the Middle East, the Borouge 2 project is preparing to start up in the middle of this year and Borouge 3, which will add another 2.5 million tonnes of polyolefin capacity by 2013, is in the FEED (front-end engineering and design) phase with site preparations ongoing. Borouge is a joint venture of Borealis and the Abu Dhabi National Oil Co. (ADNOC)
Commenting on the recent results, Borealis CEO Mark Garrett said his firm expects 2010 to grow tougher for his company in the second half of the year as additional capacities come on stream in the Middle East. For processors of polyolefins, that sounds like good news.
Borealis is owned 64% by the International Petroleum Investment Company (IPIC) of Abu Dhabi and 36% by OMV, a leading energy group in Europe. Taken together, Borealis and Borouge manufacture over 4 million tonnes of polyolefins per year. Borouge is currently tripling its polyolefins manufacturing capacity to 2 million tonnes per year by mid-2010 and an additional 2.5 million tones/yr of capacity is scheduled to come online in 2013. —Matt Defosse
