Borouge's new polypropylene production unit at Ruwais starts operations

The new unit has capacity of 480,000 tonnes per year, boosting the company’s total production by more than 25%

Borouge's new production unit in Ruwais will boost the UAE’s polypropylene production to meet growing global demand. Photo: Adnoc

Borouge, a joint venture between state energy producer Adnoc and Austrian chemicals producer Borealis, has successfully started operations at its fifth polypropylene unit (PP5) in Ruwais as it continues to expand its production capacity.

The unit will help the UAE to meet growing global demand for products in the recyclable advanced packaging, infrastructure and industrial sectors, the company said on Thursday.

“This marks further progress on Borouge’s growth journey and the development of Ruwais into a dynamic, global hub for downstream activity, enabling the UAE's long-term industrial growth and economic diversification,” Borouge chief executive Hazeem Al Suwaidi said.

“Our PP5 unit will enable us to meet our customers’ increasing demand for polypropylene solutions, especially in the packaging and infrastructure sectors across our key markets in the Middle East, Asia Pacific and Africa.”

Built within the Borouge 3 plant, the unit will deliver 480,000 tonnes a year of polypropylene, boosting the company’s total production capacity by more than 25 per cent to 2.24 million tonnes per year, and its polymer capacity of polyolefins by 11 per cent to 5 million tonnes per year.

The plant can manufacture enough raw materials each year required in the production of water supply pipes for the equivalent of 6,500 Burj Khalifa buildings.

“We work closely with our customers and value chain partners to achieve their circular economy commitments through … the development of mono-material packaging solutions that are designed for recyclability,” said Rainer Hoefling, chief executive of sales and marketing unit Borouge Pte.

The commencement of operations at PP5 follows the company's announcement earlier this month of its plans to invest in the expansion of Borouge 4, which would make its Abu Dhabi manufacturing factories the world's largest single-site polyolefin complex.

Abu Dhabi plans to triple its petrochemical production capacity from 4.5 million tonnes — currently produced entirely by Borouge in Ruwais — by 2025.

Construction of PP5, which is part of the company’s 2030 growth strategy, began in December 2018 and continued throughout the coronavirus pandemic. The commissioning of the unit began at the end of 2021.

The Borouge PP5 project received an In-Country Value score of more than 60 per cent, reflecting the level of sourcing from UAE companies.

All steel structures, piping and fittings were procured in the country. A total of 30 per cent of all installed equipment was made locally while all subcontract services were sourced within the UAE, the company said.

Borouge operates a polythene unit with a capacity of 450,000 tonnes per annum. The unit was commissioned in 2001.

Borouge 2 and 3, commissioned in 2010 and 2014, raised the capacity to 2 million tonnes and 4.5 million tonnes of polythene and polypropylene a year, respectively.

In February, Adnoc and Borealis said they were considering a potential initial public offering of a minority stake in Borouge.

Borouge consists of production unit Borouge ADP and Borouge Pte. Adnoc holds 60 per cent in Borouge ADP while Borealis holds the remainder. Both companies have an equal stake in Borouge Pte.

Adnoc and Borealis will provide further material updates “as and when appropriate”, the two companies said at the time.

No listing venue was specified for the IPO but if it lists on Abu Dhabi Securities Exchange, it would be among the latest in a string of IPOs on the second-biggest Arab stock market.