Borouge, ADNOC to develop specialty polyolefins complex in China

A consortium of Abu Dhabi state-backed firms, led by Borouge, has signed an agreement with China’s Wanhua Chemical and Wanrong New Materials (Fujian) to construct a specialty polyolefins complex in Fuzhou, Fujian Province.

The consortium, Borouge, ADNOC Group and Borealis, plans to set up a Sino-foreign joint venture with Wanrong New Materials (Fujian), with a shareholding ratio of 50:50 respectively.

The proposed complex is projected to produce 1.6 million tonnes per annum of speciality polyolefins.

The project’s final structure and financial commitments will be determined after the feasibility study, which will also study the use of artificial intelligence (AI) solutions for automated plant operations.

Borouge has a significant presence in China, operating an application centre and a compounding centre in Shanghai. Last year, nearly 30 per cent of the company’s revenue came from China, underscoring its dedication to growth in the country.

“This strategic growth initiative builds on the robust economic ties between the UAE and China and offers the potential to create value for Borouge shareholders by accelerating our expansion in China,” said Hazeem Sultan Al Suwaidi, CEO of Borouge.

“The proposed complex will leverage the strengths of our partners and majority shareholders, who bring a capacity to deploy significant capital, world-leading technology, innovation and technical expertise, as well as extensive logistics and customer networks.”

The polyolefins producer aims to strengthen its presence in China, the world’s largest and fastest-growing polyolefins market. The project will leverage Borouge and Borealis’ industry and commercial expertise, as well as technology, supply chain, and logistics synergies across the ADNOC.

The polyolefins venture will also leverage Wanhua Chemical’s robust network in the Chinese market, as well as the country’s competitive construction and energy costs. The partners are committed to developing products that promote the circular economy while powering the polyolefins complex with renewable energy.

The Abu Dhabi-listed company provides premium materials to various customer segments, including infrastructure, renewable energy, electric vehicles and advanced packaging.

The agreement, which is subject to regulatory approvals, will bolster Borouge’s premium position in the rapidly expanding market for high-quality, differentiated materials, marking a significant step in its international growth ambitions.

Borouge’s quarterly net profit jumped 37 per cent year-on-year to $273m in Q1 2024, driven by stronger pricing premia, a focus on high-value product segments, and cost efficiencies.

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