MOSCOW (MRC) -- Borealis (Vienna, Austria) says it has decided to start a process aimed at divesting its nitrogen business unit, including fertilizer, technical nitrogen, and melamine products, said Chemweek.
Any divestment “would be subject to information and consultation requirements with employee representatives as may be required under applicable laws,” it says. No potential value for the business has been given.
The company, majority owned by OMV (Vienna) with a 75% stake, operates fertilizer manufacturing plants in Austria and France and is one of Europe’s major producers with output of around 5 million metric tons/year of fertilizer products distributed via a network of approximately 60 warehouses in western, central, and southeastern Europe. It is also a market leader in the production of melamine, according to Borealis, with operations in Austria and Germany supplying the product primarily as a raw material to the woodworking industry.
Borealis says its share in the Rosier fertilizer production sites at Sas van Gent, the Netherlands, and Moustier, Belgium, is “presently not being considered within the potential sales process.” Borealis acquired a 56.86% majority share in Rosier in 2013.
The company will “continue to focus on its core activities of providing innovative solutions in the fields of polyolefins and base chemicals,” with the aim of extending parent company OMV’s value chain “towards higher value chemical products and the transformation towards a circular economy,” it says.
The start of the divestment process for its fertilizer business follows previous statements by Borealis in 2019 of its search for partners to strengthen its fertilizer business. It placed the fertilizer, melamine, and technical nitrogen business into a separate entity in October 2018, stating at the time it believed more scale and consolidation was required to make a “long-term, sustainable, and healthy fertilizer, melamine, and technical nitrogen business."
In its fourth-quarter 2020 results announced today, Borealis says a rise in natural gas prices and operational issues "negatively impacted" the quarterly contribution of its fertilizers business, with the deteriorating fertilizer market also negatively impacting its full-year 2020 earnings. Abu Dhabi-based Mubadala owns the remaining 25% interest in Borealis.
As per MRC, Borealis has fully resumed production at its steam cracker in Stenungsund, Sweden. Thus, the cracker with the capacity of 625,000 mtyear of ethylene was restarted on 15-17 January, 2021. Meanwhile, the status of the force majeure on the products from this cracker remains unclear at the moment.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
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.
MRC