Borouge, one of the youngest players in the Middle East’s petrochemicals scene, has made a deep impact in international markets and is making a significant contribution to the industrialisation of Abu Dhabi emirate, rich as it is in hydrocarbons resources.

A joint venture between the Abu Dhabi National Oil Company (Adnoc) and Borealis A/S, Borouge has been held up as an example of both operational and commercial excellence for petrochemical ventures in the region. In 2004, the company achieved a turnover of around $700 million. 
John Webster, marketing manager, Borouge Pte Ltd, recently shared Borouge’s formula for success in an exclusive interview with Gulf Industry. He said: “Our success to-date can be broadly attributed to our in-depth understanding of the market and a clear marketing vision. More specifically, the pillars of our strategy comprise a world-class production facility, strong product and technology differentiation, and our ambition to attract and retain talented professionals. 
“Our ownership structure – comprising one of the Gulf’s most respected oil and gas companies and a European plastics leader – also provides a solid platform for our growth.”  IPIC of Abu Dhabi recently acquired a 65 per cent stake in Borealis. The transaction will close in the last quarter of this year.
 A central pillar of Borouge’s success is its integrated petrochemical complex and state-of-the-art, world-scale production facility at Ruwais. The plant produces a high performance range of Borstar Enhanced PE for the Middle East and Asia Pacific markets, delivered cost-effectively from the heart of the region. Borstar is the proprietary technology of parent Borealis. 
Webster said: “To-date, we have invested in excess of  $1 billion in our Ruwais facility in the first two parts of a three-step growth plan. Step I saw the Ruwais units start up on time and under budget in December 2001, and achieve design capacity within five months and ISO 9001 certification after nine months. In March this year, we completed our Step II debottlenecking exercise, which increased our capacity from 450,000 to 600,000 tonnes per annum. 
Last July, Borouge awarded the Project Management Consultancy (PMC) and Financial Advisory contracts for the next phase of its expansion plan to Foster Wheeler International and HSBC respectively. Under Step III, the company expects to invest in excess of  $2.5 billion to expand its production capacity to 2 million tonnes of enhanced polyolefins. These appointments follow the conclusion of a feasibility study commissioned by Borouge owners, Adnoc and Borealis.  

Combining processability with good mechanical properties 
Somewhat uniquely for the Middle East, Borouge prioritises the high performance packaging, pipe system and wire and cable applications where both demands and rewards are higher than the commodity-driven applications.   
A major challenge for polymer producers is the ability to combine good mechanical properties (eg high strength) with good application processability. Borstar technology has answered that challenge by allowing the tailoring of molecular weight, molecular weight distribution and comonomer distribution across the bimodal polymer species in PE and polypropylene (PP), thus balancing both processability and good mechanical properties. 
Webster said: “Both the Borstar polymer units and cracker at Ruwais have proven to be exceptionally reliable with high first-time-right and minimal downtime. The result is a high quality and consistent product much in demand by customers in the Middle East and the Asia Pacific.”
 
Getting and keeping the best people 
When asked about how Borouge achieved so much so quickly, Webster’s answer was unequivocal – its people. 
“People attraction, development and retention will be a major challenge to Middle East producers in the coming years,” he explained. “From design, construction and commissioning through to production operators and supervisors, there is an estimated shortfall of several thousands from today through 2010 in the Gulf region.
 “In Borouge, we take this issue very seriously. In fact, three out of five of our core values focus on the need to create a safe, healthy work environment, plus an open-minded, adaptable culture to enable our people to grow to their maximum potential.”  
While Borouge’s workforce is diverse, Webster emphasised the company’s commitment to programmes that help create a pool of local professionals with the right skills and experience to contribute to the petrochemicals industry.
 
Supply and demand, today and tomorrow
 Today, the Gulf is entering the fourth wave of expansion of ethylene complexes. The Middle East continues to contribute the lion’s share of capacity expansions towards 2010, with the current new startups in China impacting the 2006 figures, and other potential projects in Thailand, India, Singapore and Indonesia. 
Given that all share the same target markets, is there enough global demand to support this increase in supply? According to Webster, the answer is a definitive “yes” in the short term. “This is certainly the case for polyethylene (PE) with the predicted growth of around 5 per cent per annum on a global level, which translates to an additional 2.5 million tonnes per annum based on the current market of some 57.5 million tonnes of PE. However, the market will inevitably become more balanced in 2008 onwards when the new capacity fully impacts.
 “We will see a shift in the centre of gravity of the petrochemical industry to the Middle East and we also will see a shift in trade flows – with traditional markets like Europe changing from a net export or balanced position to a significant importer and with China remaining only 50 per cent self sufficient despite the new capacity startups,” he predicted.
 
Value creation: Ensuring the future of the industry 
Borouge is committed to playing its part in ensuring the sustainable development of the petrochemical industry. Its view is that there is only one way to go – that of value creation, involving all the players in an industry in the effort to understand the needs of customers today and tomorrow. 
Webster warned: “The threat of commoditisation is a real one as more and more players push a limited range of standard products in high volume through the easiest channel. Focusing on tonnes and production volume alone destroys value and does not bring long-term industry growth.  
Borouge believes that by taking a value-creation approach, all participants will enjoy higher growth and higher value by stimulating market pull for application development, R&D and new services and partnerships.
“The petrochemical industry is not just about production tonnes and tubes in the ground. Our business is a complex but important one that impacts economies and the lives of millions of people,” Webster observed.
“The long-term sustainable success of this industry will depend on our collective ability to create value for customers and other stakeholders, and avoid the trap of commoditisation.”