Borouge expects $400 million in savings from its Value Enhancement Programme by end of 2023

Borouge expects $400 million in savings from its Value Enhancement Programme by end of 2023

ABU DHABI, 23rd May, 2023 (WAM) -- Khalfan AlMuhairi, Senior Vice President Region MEAE, Borouge, said that the company expects to achieve US$400 million savings from its Value Enhancement Programme of by the end of the current year 2023.

AlMuhairi told the Emirates News Agency (WAM) that the company looks forward to benefiting from the Value Enhancement Programme, which was initiated at the end of 2022 and have already achieved over US$100 million by the end of the first quarter of 2023.

He expected the programme to support the company's growth plans by improving revenues and enhancing the competitive position in light of the increased demand for Borouge products over the next five years, as governments continue to invest in infrastructure solutions. “Our highly differentiated product mix has enabled us to become more resilient and manage the cyclical nature of our business.”

AlMuhairi noted, “The circular economy is a key focus area in Borouge’s Sustainability Strategy, and we are transforming our business to create a positive impact on the planet through circularity.”

As brand owners adopt more responsible practices and promote the circular economy, there is a clear need for mono-material flexible packaging solutions which are fully recyclable and sustainable, AlMuhairi said. “Therefore, together with value chain partners such as Original Equipment Manufacturers (OEMs) and converters, we have been focusing on developing polyethylene and polypropylene mono-material flexible packaging solutions to address this challenge.”

Our innovations, including polymer wires, cable coatings and insulation materials, make power grids more reliable, help eliminate power wastage, and make it possible to transport energy from renewable sources more efficiently and over longer distances, he added.

AlMuhairi continued, “Additionally, our materials for pipes are used in many different industries including water and gas supply, wastewater and sewage disposal, plumbing and heating, and oil and gas. Our corrosion free, durable and reliable pipe solutions boost the sustainability of pipe networks by making them safer, longer lasting and more efficient, helping eliminate wastage and loss, and offering energy savings.”

He clarified, “We recognise the demand for our unique grades of polyethylene materials (PE100), because it helps with the production of polyethylene pipes with wall thickness of more than 100mm. Such large diameter and thick wall polyethylene pipes help address sustainability challenges in the infrastructure market by replacing conventional piping materials with advanced, corrosion and maintenance free 100 percent recyclable polymer materials.”

Borouge Innovation Centre in Abu Dhabi is critical to achieving our 2030 targets for increasing sales volumes of infrastructure solutions, as well as boosting consumer solutions sales by 20 percent to support the circular economy, Borouge's Senior Vice President added.

“The Middle East and Africa region remains a growth engine for Borouge, representing approximately one third of the company’s entire business by volume. In the future, our target markets of Asia, the Middle East and Africa are expected to account for about 86 percent of global polyolefins demand growth from 2022 to 2026,” AlMuhairi further stated.

“Given our ongoing capacity expansion in the UAE, we are in a competitive position to provide timely and reliable supply to our customers in these regions. For instance, our fifth polypropylene unit which started-up in early 2022 added significant production capacity, making us one of the top five polyolefin producers in Asia Pacific and the Middle East," he stated.

“There are many infrastructure opportunities in the region that require our products for pipes, wires, and cables. Today we are selling an increasing proportion of our products into the infrastructure solutions market – in Q1 2023, it was 46 percent of polyolefin sales. Sales volumes of polyethylene material, a key premium product used in infrastructure applications, is contributing positively to the overall sales mix outcome.

“Our key markets in this region are expected to continue being net polyolefins importers, as positive drivers such as expanding infrastructure and the shift to renewable energy absorb much of the additional product manufactured. We have set ambitious targets to cater to increasing demand for sustainable solutions by designing and developing consumer and infrastructure solutions within our Borouge Innovation Centre based in Abu Dhabi," AlMuhairi noted.

We are sharpening our focus on growing demand in East Africa and have grown our East African sales of infrastructure solutions over the past five years, AlMuhairi highlighted. “Our optimum materials are used to make durable and reliable pipelines for various ongoing development projects across the Middle East and Africa regions.”

AlMuhairi affirmed, “Asia Pacific continues to be our largest sales market, contributing 65 percent of total revenue in 2022. Within Asia, we have clear growth plans for sustainable applications including infrastructure, energy, advanced packaging, mobility, agriculture, and healthcare, and we have a strategy in place when it comes to circularity.”

“China and India are key growth markets for us. We have had a presence in China for the past 25 years and our business has expanded from the coastal areas in eastern and southern China to the central and western regions. China’s rapid urbanisation plans aimed at creating a sustainable economy offer a further boost for our business.

“Today, the percentage of our business in China generated from infrastructure solutions is over 50 percent, and we contribute to the country’s sustainability agenda with our differentiated solutions, including material for water and gas pipes, heating systems, and submarine cables for offshore wind farms built for the green energy transition.

“India is also a critical market for us. We serve many industrial sectors in India and have established several local partnerships with polyolefin converters. At present, our solutions are used across industrial sectors in the country, to which we supply our proprietary polyethylene products for infrastructure applications," AlMuhairi explained.

He added, “We collaborate with multiple value-chain partners, including one of India’s largest wafer and snacks manufacturers on advanced packaging solutions and a mulch film manufacturer to facilitate efficient solutions for the fast-growing agriculture industry in the country.”

AlMuhairi stressed that “Polyolefin demand in our high growth markets in Asia, the Middle East and Africa is expected to outstrip supply and outpace GDP growth. Consequently, we are optimistic and excited about our sustainable growth in these markets, which demonstrate healthy and increasing demand for polyolefin product.”

“Another growing opportunity for Borouge is the provision of better healthcare and improved hygiene in emerging economies, creating demand for advanced polyolefin grades for medical appliances, devices, and protective equipment and apparel,” AlMuhairi conculded.