Borouge, the joint venture between innovative plastics solutions provider Borealis and the Abu Dhabi National Oil Company (ADNOC), is gearing up its support for automotive customers across Asia and the Middle East with major investments and partnerships announced in recent months.
One of the first investments being made is a new manufacturing compounding unit in Shanghai, China. It will enable Borouge to supply up to 50,000 tons a year (t/y) of compounded high end resins to the automotive industry. The facility will be operational in mid-2010. It has the potential to expand to 80,000 t/y, providing a range of polypropylene (PP) and single-material solutions for bumpers, body panels, dashboards and door claddings developed by Borealis in Europe as part of its active commitment to support the automotive industry to tackle on-going manufacturing, performance, weight-saving and fuel-reduction challenges.
The unit also leverages Borouge’s current expansion project at its plant in Abu Dhabi. It plans to triple its polyolefins manufacturing capacity at the plant to two million t/y by mid-2010. This expansion adds the capability to manufacture polypropylene at the plant. An additional 2.5 million t/y of polyolefins capacity is planned under the next phase of expansion – Borouge 3. These investments will be complemented by an adjacent large-scale logistics hub, as well as a brand new hub in Guangzhou, China which will be capable of handling the supply and distribution of approximately 246.000 t/y of value-added polyolefins to customers in Southern China.
Investments in a logistics hub in Singapore will provide first class local logistics and distribution services to Borouge’s customers throughout South East Asia when it becomes operational in mid-2010.
To tap India’s burgeoning demand from its auto industry for advanced polypropylene materials, Borouge has tied up with Machino Polymers Limited, a leading supplier of PP compounds to the automotive industry in India. The agreement includes the use of Borealis’ and Borouge’s proprietary Borstar technology resins to manufacture high performance, specialty PP compounds in accordance with Machino Polymers’ compounding technology.
“The cooperation will facilitate the introduction of innovative automotive applications into the Indian market, as well as new technology and cost-saving solutions originally developed by Borealis for the European market to support India’s increasing demand for automobiles,” says Kevin Liu, Vice President Mobility, Borouge Pte Ltd.
Automotive Industries (AI) asked Liu to expand on the company’s strategy for the automotive industry in Asia.
Liu: Borealis’ partnerships with leading international car manufacturers and their suppliers has led to new innovations in vehicle safety and making cars more environmentally friendly and economical.
Our substantial capacity investments in the Middle East will focus production on the needs of our customers in the Middle East, Asia-Pacific (including China), South East Asia, the Indian sub-continent and Africa. This is a broad region with good growth rates, and we want to be able to meet their needs. The new compounding manufacturing plant in Shanghai and the logistics hubs in China and Singapore will allow us to act as a local supplier and enable us to respond quickly to the needs of customers.
AI: How does the partnership with Machino Polymers in India fit in with this strategy?
Liu: Borouge benefits from Borealis’ extensive experience in developing high performance, cost-efficient solutions for the automotive industry and we will now be in a position to extend these advantages to this important market.
AI: What expectations do you have from these emerging markets?
Liu: Most of the emerging markets are now in Asia, and particularly China. In China, the market needs are expected to grow over 10% per year in the next five years. To capitalize on this, and earn our place as a reliable, strong player in the region’s automotive markets, Borouge will offer better than competition services and innovative solutions. We are committed to establishing local supplier status, building a direct sales force and developing longterm partnerships with strategic customers.
AI: Has the economic recession in the developed world impacted your company and will it delay Borouge 3 – the expansion of your polyolefin operations in Abu Dhabi?
Liu: We have a very clear strategy as to where we want to be. We are continuing to invest in our plant in the Middle East, and in our planned Chinese and Singapore operations so that we are ready to capitalize on the high growth rates in the automotive markets when they resume.
Automotive Industries asked Harald Hammer, Vice President Business Unit Mobility at Borealis to share some of the latest developments in the automotive markets.
Hammer: Borealis’ product development strategy for the automotive industry is focused firmly on innovating and investing to provide solutions that address its latest needs. In the current climate this means bringing products to market that deliver the step change in cost-efficiency, weight reduction and environmental performance.
AI: What are some of the innovations coming out of the Borealis stable?
Hammer: In addition to the many benefits offered by our value-creating Daplen, Borcom and Nepol innovations, our pioneering XMOD glass fiber reinforced PP compounds are pushing the boundaries of lightweight vehicle interior components. They have been developed specifically to give the automotive industry a lightweight material alternative which, at the same time meets the need for high parts performance and more economical production. Borealis’ unique glass fiber reinforced PP compound XMOD GB306SAF is breaking new ground in high tech under-the-bonnet applications as the first PP to be used for Air Intake Manifolds (AIMs). VW is the first OEM to switch from glass reinforced Polyamides to XMOD GB306SAF in order to improve production cost-efficiency and achieve performance and environment-friendly benefits for the AIMs used on a wide variety of its models.
AI: How does your product strategy differ across the globe?
Hammer: We aim to address global challenges affecting the automotive industry by developing reliable and responsive partnerships with suppliers and manufacturers, ensuring our product innovations and their availability are supported by appropriate supply capabilities and on-the-ground support for each region. Earlier this year Borealis appointed Polymer Z as our official sales agent for the North American automotive market. Polymer Z is responsible for market development and sales of Borealis’ innovative automotive products in North America as well as for providing local customers with high-quality technical service, sales and marketing support.
Another example is our investment program in our two production units in Brazil, in Itatiba and Triunfo. At the end of last year we invested EUR 6,9-million in a new extrusion line, increasing our polypropylene compounding capacity by 11,000 t/y. This investment not only reflects the way we respond to customers’ ongoing requests for more PP compounds, it also helps to boost our R&D activities in the region.