MOSCOW (MRC) -- Borealis (Vienna), one of Europe’s major producers of polyolefins, on Friday reported a huge increase in fourth-quarter and full-year profits, making 2015 the best year in the company’s history, said the company in its press release.
Net profit in the fourth-quarter rose 72% to EUR242.0 million (USD264.6 million) and in the full-year was up by 73% to EUR988 million. Fourth-quarter and full-year sales were down, however. In the fourth quarter sales dropped 9% to EUR1.8 billion and in the whole of 2015 were down 8% to EUR7.7 billion. The improved result was driven by overall stronger margins in the polyolefins business, a higher contribution from the base chemicals operation and an improved contribution from Borouge, Borealis’s joint venture in Abu Dhabi, following the start-up of the Borouge 3 project. Within base chemicals, the fertilizer business saw operational improvements but the overall operability is not yet at the desired level, the company says.
Borealis also expects further improvement in its fertilizer business but says that Borouge will be hurt by the lower price environment in Asia. "Overall, Borealis expects to see a solid, albeit lower profitability in 2016 compared to 2015, as the strategy of growing the three profit centers, polyolefins, base chemicals and Borouge contributes to ensure the competiveness and resilience of the company," Garrett says. In fertilizers, Garrett confirms that Borealis’s target is to double capacity to 10 million m.t./year to become the second largest fertilizer player in Europe after Yara International. Borealis, meanwhile, is making progress with its ammonia project on the US Gulf Coast and is already lining up buyers in the US for some of the output. The rest will be subject to swaps to balance out its requirements in Europe.
Borouge has completed construction of Borouge 3, which has given the company a combined of 4.5 million m.t./year of polyolefins. The only plant yet to be put on line is the cross-linked polyethylene (XLPE) plant, whose commissioning has been further delayed until May. This is because Borouge wanted to make sure the LyondellBasell-process low-density polyethylene plant, which forms part of Borouge 3 and will feed the XLPE plant, is running well. Garrett tells CW that a feasibility study is under way to debottleneck Borouge 1, 2 and 3, which would give Borouge an extra 1 million m.t./year of combined ethylene and propylene capacity. This would lead to the debottlenecking of the existing PE and polypropylene (PP) plants and the construction of one new PP facility with a capacity of between 500,000-600,000 m.t./year of PP. A decision on the project will be made later this year.
As MRC informed earlier, Borouge selected Neste Jacobs, a technology, engineering and project management company, as a front-end engineering and design (FEED) service contractor for its polyethylene (PE) plant modification project, located in the Ruwais industrial area of the UAE. This project is the third FEED project in a row which Neste Jacobs is delivering to Borouge in the UAE under the long-term service contract that was previously signed between the two companies (Tier 1 contract). Borouge is a joint venture between the Abu Dhabi National Oil company and Borealis.
Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. Borealis is headquartered in Vienna, Austria, and operates in over 120 countries with around 5,300 employees worldwide.
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