Successful start up of Borouge 3 polyolefins plant props net profit at Borealis to record levels in 2014

Successful start up of the Borouge 3 polyolefins project helped drive net profit at Borealis to record levels in 2014, as the company was also boosted by stronger margins in the olefins and polyolefins business. Although net profit was down to €141 million (US$158 mln) in Q4, compared with €148 mln (US$165 mln) in Q4-2013, full year 2014 profits surged to €571 mln (US$640 mln) compared with €423 mln (US$474 mln) in 2013. Lower working capital needs driven by a lower price environment for polyolefins, and an inventory reduction following the completion of the site turnaround in Burghausen, Germany, saw Borealis' net debt fall. 2014 was a year of consolidation for Borealis, with the company increasing its long-term feedstock flexibility for the petrochemical plant in Stenungsund, Sweden, whilst signing a long-term agreement with Norwegian Statoil to source ethane from it for Borealis' steam cracker. Apart from ethane, the facility can crack naphtha, propane and butane. Stenungsund has significant liquefied petroleum gas (LPG) storage capacity, allowing the company to source LPG from various sources with vessel sizes up to very large gas carriers. In August, Borealis signed in addition a 10-year agreement with Antero Resources to supply ethane from the US. The project also includes a shipping agreement with Navigator Holdings and a related multi-million investment in an upgrade of the cracker and the construction of an ethane storage tank. The ethane supplied from the US complements the ethane supply contract with Statoil, providing Borealis with attractive alternative sources of feedstock. A series of rebranding initiatives, including the launch of a new corporate design and the introduction of the new Borealis tagline were timed to coincide with the twentieth anniversary of the company in March. At the core of the new Borealis positioning is the tagline 'Keep Discovering', which draws on the spirit of continual innovation that has always been integral to Borealis and which was celebrated internally throughout 2014. In August, the company’s strategy to grow its polyolefin business in specific market areas was underlined with the acquisition of all the outstanding shares in DuPont Holding Netherland B.V.’s shares of Speciality Polymers Antwerp N.V., located in Zwijndrecht, Belgium. Borealis continued to expand its footprint in South America, most specifically in Brazil, where the company has made a substantial investment in its Itatiba complex near Sao Paulo in order to better exploit growth opportunities. For Borealis, 2014 has been a period of active consolidation following a period of real transformation. The company continued work on earlier acquisitions like Borealis Plastomers, formerly DEXPlastomers and Borealis’ fertilizer production in France, formerly GPN S.A.