opportunities in a globalising world: strategies for emea · base chemicals and fertilizers...
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Opportunities
in a Globalising World:
Strategies for Europe
IHS Markit WPC
Thomas Van De Velde
March 21st , 2018
Borealis at a glance
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EUR 7.6billion
sales revenuein 2017
(>EUR 9 billionwith Borouge)
Operates in over 120 countries
on 5 continents
Head officein Vienna,
Austria EUR 1.1 billion
net profitfor 2017
Production and sales of polyolefins,
base chemicalsand fertilizers
Ownership structure
Mubadala, Abu DhabiOMV, Austria
2nd largest polyolefin producer
in Europe
Borouge operates world’s largest
integrated PO site in Ruwais, UAE
6,600employees
+3,500 in Borouge
Borealis foundation for sustainable growth
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Running complex
chemical assets safely
Ability to build large
complex projects
Application focus
Access to ME & Asia +
strong brand name
Broad Technology Suite
including Borstar®
technology
Fit to Borealis
businesses
Our unique strengths
Ability to fund
In combination
Access to market
Access to advantaged
feedstock
Right technology
Our key criteria
Borealis’ portfolio of leading polyolefin technologies
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Polyolefin Technologies Post-Reactor Technologies
Borstar® PEBimodal LLD, MD & HDPE
Borstar® PPMultimodal PP
Borealis SIRIUS Catalyst Technology
Borlink™Wire & Cable TechnologyPlatform
Borceed™Plastomers and Elastomers
Daploy™ HMS PPHigh melt strength PP
Fibremod™ Engineered
Fibre Compounds
Quentys™ Empowering Solar
Anteo™ Borstar BimodalTerpolymer PE
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Global ethylene capacity and production grows steadily, but with regional differences
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50
40
30
2010
10
20
20302000 2020
0
Production Total Capacity
203020102000
40
30
50
20
10
0
2020
10
2010 203020202000
40
30
20
50
0 0
2000
30
20302020
50
20
10
2010
40200
150
2000 2020
100
0
50
20302010
250
Source: IHS Markit - Chemical Supply & Demand (Spring 2017 Update); WE and CE … Western and Central Europe according to IHS
Ethylene capacity and production in million metric tons
United States WE and CE ChinaMiddle EastWorld
Ethylene growth driven by feedstock advantage –propylene is quite different
Ethylene capacity additions go where feedstock is advantaged
Propylene capacity additions go where the market is
Methanol, propane, naphtha travel well; terminals and vessels exists
Europe is not significantly disadvantaged particularly when feeding
existing downstream, especially in the propylene derivatives
Borealis considering world scale new PDH in Antwerp
Would fill the gap left by refineries and crackers moving to lighter feed
Primarily to feed own PP assets (existing and expansions) and 3rd
party monomer demand
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150
100
50
0
200
USEuropeCapacity RoWMiddle East China
50
100
150
0
200
20052000 202520202010 2015
On-purpose Conventional
Propylene production
Source: IHS Markit
Chemical Supply & Demand (Spring 2017 Update); Capacity … delta between global production and capacity, Conventional … sum of steam crackers, FCC splitters and refinery grade direct
Bring the feedstock advantage to Europe
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Key belief is that US natural gas retains its price advantage long term
Price advantage directly correlated with oil price: higher the oil
higher the benefit
Long term point-to-point commitments required for pipelines,
terminals and vessels
Factors to consider: oil and US ethane price view, value of optionality
At oil prices below 50 USD/bbl, ethane has not a great business case
rather a hedge for higher prices to come
Borealis already moving ethane from North Sea to Sweden and has
additionally added ethane from US (invested around MEUR 120)
Logistics capabilities – the key to capture global opportunities
Key to be able to source feed globally and serve customers locally
Capability to handle VLGC size vessels and large liquid cargoes
Import, export capability taking advantage of volatility and seasonality
All our coastal locations capable of handling VLGC size vessels
Largest propane and butane storage in Europe in Stenungsund with
export capability
Invested in Porvoo (Finland) a 150.000 m3 propane /butane cavern
Large propylene tank in Antwerp for trading and supply security
Contaminants management is in focus; bad past experience has
taught us
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Continuous maintenance investments a must to keep business competitive
Operability and reliability of „aged“ assets are key to profitability
Sustainable asset care increasingly important
Energy improvements: good business and authority requirement
Balance between ROCE dilutive and accretive to be watched
Borealis´ Stenungsund Cracker Furnace Revamp Programme
(MEUR 160) to bring location to the highest currently available
standards in process safety, energy efficiency and secure long
term sustainability
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We assess both the positive and
negative consequences of our activities
on People, Planet and Profit to take
responsible decisions.
Sustainability means finding the right balance between People, Planet and Profit
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We will...
support profitable Business Growth
enhance the sustainability of our operations and supply chain
enhance internal capabilities, communication & stakeholder
engagement
While focused on:
Definition Our approach
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Profit Planet
People
Designed for plastic
packaging recyclingEfficient and reliable
energy transmissionValue-adding
healthcare solutions
Social license to operate demanded
Chemical industry under scrutiny from politicians and public
We need to be seen to positively contribute to:
Energy efficiency
Accident free operations
Air, water, noise pollution reduction
Education and employment
Uphill battle which we need to win with facts
European industry players working together to minimize waste,
littering and improve awareness
Borealis chairs Plastics Europe Marine Litter Solutions WG
“Stopping the Tap on Ocean Plastics” (STOP) - A joint initiative
by Borealis and Borouge to stop leakage plastics to the ocean
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Borealis TRI frequency
Own vs. Contractors 1996 – 2016
Circular economy solutions expected
Plastics have bad sustainability and circularity reputation
Yet our products are recyclable, reusable, durable, non-toxic and
light weight
Achilles heel is littering and landfill
Need to embrace circularity to remain ahead of the game
Borealis entered mechanical recycling in 2016
Creation and chairing of EU Polyolefin Circular Economy Platform
Member of the New Plastics Economy Initiative led by Ellen
MacArthur foundation – first prime plastics producer
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Borealis‘ approach to advocacy: from re-active to progressive
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Advocating “what to DO” with tangible solutions
Stakeholder management
Achieved significant external recognition
Gained reputation as leader in Circular Economy
Trusted as competent dialogue & business partner
Shaped policies and regulations
Increased visibility and brand value
Kicked off development of new innovative PO
solutions
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In summary: the US is not the only game in town – Europe will continue to thrive
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Feedstock price based competitiveness particularly in absolute terms
volatile and transitional
Innovation, workforce quality and capex matters
Logistics and energy infrastructure is the backbone
High number of integrated chemical clusters and proximity to customers
Smart regulation and energy policies needed for competitiveness
The region leading in circular economy solutions
And finally we Europeans need some luck to remain relevant: low oil,
weak euro, global growth, high US ethane…to list of few for your
evening prayers
Thank you
Unless otherwise specifically stated, this presentation, any part of it, or
any information contained herein may only be copied, disclosed or used
within the Borealis group of companies. Borealis AG and its affiliates
give no warranty and make no representation as to the accuracy,
completeness or fitness for any particular use of the information
contained herein.
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