Borouge to expand its second ethylene unit to boost production by 230,000 tonne

Borouge to expand its second ethylene unit to boost production by 230,000 tonne

The company will distribute US $1.3 billion in dividends for 2023

  • By ICN Bureau | March 31, 2024

Borouge Plc, a leading petrochemicals company that provides innovative and differentiated polyolefins solutions, announced a new expansion project. “Our second ethylene unit (EU2) is advancing plans to increase our total production of olefins and polyolefins by 230,000 tonne after project completion in 2028, and is expected to contribute approximately $ 220 to 250 million to Borouge’s revenue per year,” Dr. Sultan Al Jaber, Chairman of Borouge, said adding that the company is pursuing accelerated global growth opportunities, including an opportunity in the Asia Pacific region that has reached feasibility stage.

According to press release issued by Borouge, the company confirmed shareholder approval of a $650 million (7.94 fils/share) final 2023 cash dividend at its Annual General Meeting (AGM). The company also confirmed its intention to pay a total dividend of $1.3 billion for 2024, reinforcing its commitment to shareholder value and demonstrating its confidence and ability in generating earnings and profits even in the face of challenging market conditions.

Borouge is also pursuing accelerated growth domestically and internationally. Locally, Borouge 4, a major strategic growth project, is expected to add approximately $1.5 - $1.9 billion to revenue annually after recontribution and full production ramp-up of the plant. Borouge 4 will boost the company’s production capacity by 28%, making Borouge’s Al Ruwais production site the world’s largest integrated single-site polyolefin complex. I am also pleased to announce a new expansion project.

Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, commented: “The significant $1.3 billion dividend from our 2023 earnings reflects the success of our business strategy and our operational resilience in a challenging market environment. Our outstanding operational and commercial excellence yielded exceptional performance compared with our global peers. This was supported by a highly effective Value Enhancement Programme, which enabled us to successfully optimise revenues and streamline costs amid softening prices globally. We will explore in parallel further levers to enhance our competitive cost position. Once operational, Borouge 4 will significantly increase our capacity by 28% while enhancing our product portfolio and margin. Our focus remains on sustainable growth and delivering value, with our shareholders set to profit from exceptional recurring dividends in the years to come.”

The company is also driving operational excellence and innovation with digitalisation and AI. “Borouge has embarked on several AI and advanced technology initiatives, which delivered $58 million in value in 2023. The company targets several significant milestones that would enable the realisation of around $280 million in value generation in the coming years. Its Innovation Centre facilitated the introduction of eight groundbreaking products in 2023, including a pioneering solution for gas pipes that is now globally recognised for its unrivalled safety and reliability standards,” the statement reads.

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