Borealis profits tumble in 2009, predicts ‘tougher’ 2010
The Austria-based company warned that 2010 was likely to be even more challenging in the face of increased competition from the Middles East and the implementation of two major start-up projects of its own.
The plastics and chemical producer said the world recession “hit with full force in 2009, causing a significant downturn in customer and industry demand”. The financial turmoil also put pressure on both polyolefin margins and start-up of the 350,000 t/y LDPE plant in Sweden – the company’s largest European investment to date. Borealis said there had been economic casualties and it had taken the "difficult decision” to shutter its HDPE plant in Belgium by the end of this month.
Middle East expansion
The company announced its Borouge site in the Middle East is due to triple its polyethylene and polypropylene capacity to 2m t/y by mid-2010. A further 2.5m t/y capacity boost is due to come on line by 2013 on completion of the third phase of expansion at the site.
Chief executive Mark Garrett said: “2009 was a tough year for the plastics industry. We suffered from the economic crisis, a demand drop as well as additional capacities coming on-stream in the Middle East which resulted in lower margins.”
The company said its focus on innovation, safety and growth projects combined with cost cutting and cash generation were successful in getting through the “extremely difficult environment”.
“This year’s financial result is lower than what we recorded in the boom years but in light of the severe recession this is an outstanding achievement that goes beyond our record year of 2007 and is a testament to our employees’ hard work and commitment,” added Garret. “With two major start-ups, more Middle East capacity coming online and a continuing difficult economy we expect 2010 to be even tougher than 2009.”
