MOSCOW (MRC) -- Borealis AG, a producer of polyolefins, base chemicals, and fertilizers, on Wednesday announced 12% lower second-quarter net profit and 10% lower consolidated sales of EUR309 million (USD348.5 million) and EUR2.2 billion, respectively, still the company's second-best quarterly result after the record 2015, said Chemweek.
The second-quarter results were supported by strong margins in the polyolefins business and “excellent operations” at Borouge, the polyolefins joint venture (JV) in Abu Dhabi, United Arab Emirates, following the full start-up of the JV's Borouge 3 complex.
Speaking exclusively to CW this morning, CEO Mark Garrett and chief financial officer Mark Tonkens further detailed Borealis's performance, outlook, and plans. Garrett tells CW that plans are firming to add 1 million metric tons per year (MMt/y) of olefins capacity in Abu Dhabi together with a corresponding volume of polyolefins there. He also says Borealis is looking at opportunities that may involve sister company Nova Chemicals Corp. in Canada. Meanwhile, shipments of ethane from the United States to Borealis’s Stenungsund, Sweden, steam cracker have been delayed to the third quarter of 2017 following the nine-month delay to completing of the Markus Hook Refinery project in Pennsylvania.
Borouge’s project to add 1 MMt/y of capacity will comprise adding 350,000 metric tons per year of PE through debottlenecking the Borouge 2 complex and constructing a grassroots 650,000–metric tons per year polypropylene (PP) plant on a plot adjacent to Borouge 3. The PP plant, based on proprietary Borstar technology, will source its propylene from Abu Dhabi National Oil Co.'s Takreer refinery. Extra ethylene would come from the debottlenecking of the Borouge 2 and 3 crackers. The project has no precise timeline, but Garrett foresees the extra tonnage becoming available in three years. The PP plant could take longer, however.
On completion, Borouge’s polyolefins capacity is expected to rise to 5.5 MMt/y, including about 2 MMt/y of PP, and together with Borealis to 9 MMt/y. Meanwhile, Nova—with Borealis a member of International Petroleum Investment Co. (IPIC; Abu Dhabi)—is completing a 450,000–metric tons per year plant at Joffre, Alberta Province, Canada this year that will raise its total to 2.3 MMt/y and that of the IPIC family to 10.3 MMt/y by the end of 2016. Borealis may also look at further cooperation with Nova, which is considering constructing an Advanced Sclairtech technology PE plant at Sarnia, Ontario Province, Canada, and says it would like to build the facility in a JV with an IPIC member. “We are always interested in optimizing across the family," Garrett says.
As MRC informed earlier, Borealis reported an 86 percent jump in first-quarter net profit to 255 million euros (USD293 million) boosted by better margins in its polyolefin business.
Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries. It generated EUR 8.3 billion in sales revenue in 2014.
MRC