Business | Oil & Gas
Borouge expansion on track
Abu Dhabi-based petrochemicals maker Borouge said it will not slow down its expansion plans despite the global economic crisis reducing demand for plastics.
- By Shakir Husain, Staff Reporter
- Published: 23:31 January 12, 2009
- William Yau, CEO of Borouge, and Hussain Lootah, Senior Vice-President, at a press conference in Dubai.
- Image Credit: Supplied Picture
Dubai: Abu Dhabi-based petrochemicals maker Borouge said it will not slow down its expansion plans despite the global economic crisis reducing demand for plastics.
The company said work on its first overseas manufacturing plant in Shanghai is progressing as planned and it will build new logistics hubs in Southeast Asia and South Asia to distribute products.
The Shanghai facility will have a capacity of 50,000 tonnes when it begins production in early 2010. The capacity can be ramped up to 80,000 tonnes if there is demand, said William Yau, chief executive officer of Borouge's marketing company in Singapore.
The plant, announced in August 2007 during a boom time for the world economy, will mainly produce materials used in the automobile industry.
Yau said the company still sees good demand for its products despite the global car-making industry taking a beating amid the credit market crisis and falling car sales.
"It depends on which markets you look at. In China, the automotive industry is slowing down but it is still growing," he said. He added demand for plastics in the infrastructure sector is also "more stable compared with the other parts of the business."
Borouge, a joint venture between Abu Dhabi National Oil Company and plastics maker Borealis, is set to start work on a new logistics facility in China as it aims to supply more of its output from Abu Dhabi to East Asia.
The new supply centre will have a capacity to handle 300,000 tonnes a year. Borouge began work on a 600,000-tonne capacity logistics centre in Shanghai in November last year.
"We will do a ground-braking ceremony next week in Guangzhou. Apart from these two centres we are also evaluating a few other regional hubs," Yau said.
"We have always strived to get closer to our customers. Opening of hubs at different locations is a step towards that objective," he said.
Borouge's current production capacity in Abu Dhabi is 600,000 tonnes of polyethylene per year.
The $5-billion Borouge 2 expansion will see the construction alongside the existing facilities in Ruwais of one of the world's largest ethane crackers facility producing 1.4 million tonnes of ethylene per annum.
The company is looking at the third stage of its expansion to build capacity beyond Borouge 2 to cope with the increasing demand.
A feasibility study is under way on building a third polyolefin project in Abu Dhabi.
"We do not see a slowing down in the evaluation process of Borouge 3. We are speeding up all the feasibility studies so that we would be able to make a conclusion soon," Yau said.
Borouge has set up an innovation centre in Abu Dhabi to complement Borouge 2.
The centre is expected to employ up to 45 researchers in the initial phase.
50,000: capacity of Borouge's China facility in tonnes
600,000: Borouge's present production capacity
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