"We go to the market with an offer of differentiated products at scale, which we deliver through our advanced technologies and innovation capabilities."
Could you summarize Borouge’s latest focus and developments?
Borouge is an integrated polyolefin company with over 20 years’ experience. We provide polyethylene and polypropylene solutions to the infrastructure, energy, automotive, packaging, agriculture, and healthcare industries, which gives us a broad sectorial exposure. We have continued to grow our business in recent years, investing in added capacity. By the end of 2021, we will be opening our newest polypropylene production plant, which will add 480,000 tonnes/year (t/y) of output, bringing our total capacity close to 5 million t/y. Besides investing in the “hardware” of the business, we are constantly developing our product portfolio through innovation. In 2020, we launched a new LLDPE (linear low-density polyethylene) solution called Anbiq™ for flexible packaging and we also launched a new pre-compounded PE100 grade developed specially for drinking water pipes in China.
Reflecting back on 2020, how did Borouge’s different product lines perform?
Despite the many challenges, Borouge was able to grow in 2020. The increased focus on food safety, especially as some foods needed to travel for longer periods due to supply chain disruptions, brought growth into our food packaging business, which had slowed down in previous years due to higher environmental pressures. Agriculture also had a strong run, especially as governments tried to increase food self-sufficiency by supporting domestic production. Among the segments we serve, the automotive sector has been under the most pressure, though recovery in the last quarter of 2020 was good.
What do you identify as key segments of growth moving forward?
We go to the market with an offer of differentiated products at scale, which we deliver through our advanced technologies and innovation capabilities. We foresee significant growth in the infrastructure sector, for pressure pipes (for water and gas), which are replacing traditional zinc and copper pipes. Secondly, we also have high expectations from the agriculture sector, where we contribute to more sustainable solutions: for instance, our innovations in irrigation pipes allow for more efficient water use in rice paddy fields, which are normally flooded with water. Similarly, we are proposing new greenhouse materials for a better light diffusion to improve the life and quality of the plants. We have also begun producing high, medium and low-voltage insulation materials used in the energy sector. Finally, the upcoming production line also allows us to develop more packaging products with focus on durable packaging and those that can be recycled easily.
Borealis, one of Borouge’s parent companies, started using renewable feedstock for the production of PP. To what extent are renewable feedstocks an answer to plastic circularity? What other solutions are being explored by the industry and by Borouge itself?
Borealis replaced for the first-time fossil fuels feedstock to produce polypropylene at its Belgium plant. Borouge is involved in marketing these products in Japan, having just received our ISCC (International Sustainability and Carbon Certification) PLUS, which confirms the traceability and compliance to sustainability standards of our practices across every step of our supply chain. There is a customer base for these products, albeit still small; the costs and complexity associated with the production of renewable products is commensurate, and the products themselves are significantly more expensive. Availability of renewable feedstock is currently not sufficient to meet the scale of the overall demand for plastic products, therefore a complete transition to renewable feedstocks is unlikely, so traditional oil-based raw materials will continue to have a role.
At Borouge, we are also working to improve the durability, reusability, and recyclability of the end product. One area of our work is to extend the product’s lifetime so that it can be used multiple times. Another focus is making these products more recyclable: some products are complex and made of too many materials, but by simplifying the composition and using mono-materials, we can make them more easily recyclable.
Chemical recycling, which is the chemical conversion of a plastic products into its basic components, which are then polymerized once again into a new product, will also open more opportunities in the future. The technology is currently still in development and Borealis has partnered with OMV to test this process in a pilot plant at OMV’s refinery in Austria.
I believe the market will eventually come to a price equilibrium between virgin and recycled plastics, but we are still in the early stages in this journey.
Could you give us an example of Borouge’s social initiatives?
Borouge’s flagship ESG program is the “Water for the World” initiative, together with Borealis, through which we partner with local NGOs to provide drinking water and sanitation to communities. We have been driving these projects in Kenya, Mozambique, Vietnam, and northern Pakistan, to name a few. In the midst of the bigger discussion on global warming or Covid-19, water scarcity remains as one of the most imminent challenges humanity confronts. In Singapore, where we are also short on water, we depend on recycled water or “NEWater” to tackle this issue. Together with climate change, I expect water scarcity will become more prominent in years to come.
How do you see the future of the chemical industry in Singapore?
Singapore has a well-developed traditional petrochemical base on Jurong Island that will continue growing. As any advanced economy, Singapore follows a natural trend towards more specialised, higher-value products, across its economic sectors, including specialty chemicals. Nevertheless, it is the availability of refineries and crackers which provide opportunities for material integration for specialty players, who can plug in easily to this network. Besides the production platform, there is a thriving marketing and distribution segment that is growing fast.