Borouge, the Abu Dhabi-based polymer manufacturer, is set to further tighten its grip on the region's plastics industry, launching the latest stage of a massive expansion program that will both increase its output and product range.
Founded in 1998 as a joint venture between the Abu Dhabi National Oil Company, which has a 60% stake in the firm, and plastics provider Borealis, headquartered in Vienna, Borouge has become one of the leading providers of plastics products in the Middle East, Africa and the Asia-Pacific region. It also has a 4 to 5% global market share may well increase.
On June 4, Borouge signed two contracts, with a combined value of $3.1bn, which will extend the capacity of its facilities at Ruwais, to the west of Abu Dhabi city. When completed in three years time, the company's annual production will be trebled, reaching 2m tonnes of polyolefins, including facilities to manufacture polypropylene.
The first contract was with Italian firm Tecnimont for the construction of three new Borstar technology polyolefins units, material handling facilities, port infrastructure and laboratories. At $1.85bn it is the largest supplier contract ever entered into by Borouge. Tecnimont beat out other leading companies ABB Lummus Global, Mitsui Engineering and Shipbuilding, and Kvaerner Process for the contract.
The other contract, worth $1.23bn, is with Tecnicas Reunidas of Spain. It covers the construction of offsite and utility facilities for the expanded production facility.
At the contract's signing, Harri Bucht, Borouge's chief executive officer, said, "Today marks a major step forward in our expansion plans and signing these contracts lays down a path to tripling our production capacity by 2010. This is a major project that demonstrates the commitment and ambition not just of Borouge but of the petrochemical industry in the Gulf."
The latest contracts are just the most recent step in Borouge's ambitious expansion program. In January this year, the company inked a $1.3bn contract with Linde Engineering/CCC for the construction of a new ethylene cracker. As with the work being undertaken by Tecnicas Reunidas and Tecnimont, the ethylene cracker is due to be completed in 2010.
Also in the pipeline is a $1.1bn Olefine conversion unit, with the contract for this facility to be awarded shortly, according to the company. This will bring the total cost of the project at Ruwais to $5.5bn.
Not only will Borouge's new facility boost its output, it will also allow a four-fold increase in the grades of polyolefins products the company will be able to supply, said Harald Hammer, chief executive of Borouge's marketing company.
Since actual production started at the beginning of 2002, Borouge has been steadily increasing its range to take in water, gas and industrial pipe systems, power and communication cables, advanced packaging automotive components and other high-performance, high-value plastic products.
One of the latest products has been Daplen, a thermoplastic polyolefin specially developed for the automotive sector. Vehicle manufacturer BMW is now using Daplen in the world's first fully integrated fender module, with the new unit integrating headlamp reinforcements and wheel housings, cleaning systems, airbag sensors and cooling devices in a single lightweight casting. The new fender is said to offer greater protection for pedestrians, being able to bend on impact in a way that traditional metal components cannot.
Borouge is also working to back up its production capacity and to keep ahead of the pack in research and development. In mid September it announced it would set up a research and innovations centre in Abu Dhabi to focus on developing practical solutions for plastic material applications. The new centre, which will work in co-operation with Borealis facilities in Finland, Austria and Scandinavia, is scheduled to open its doors in 2009.
With billions of dollars of new investments as well as new and innovative products either coming out or in the development stage, Borouge has fast become not only a market leader but also a shining light of Abu Dhabi's campaign to diversify the emirate's economy and build for the future.