Borouge, a leading petrochemical company specializing in innovative and unique polyolefin solutions, held its first Annual General Meeting (AGM) on March 13, 2023.
Shareholders voted to approve a final dividend of $650 million for FY2022, or about 7.9 fils per share, which brings the total post-IPO dividend paid for the year (June-December 2022) to $975 million.
A final dividend will be paid to shareholders in April 2023, and the company has committed to paying a dividend of US$1.3 billion in 2023. Since its successful listing, Borouge has demonstrated an exceptional performance, addressing market challenges and positioning for future growth to deliver competitive shareholder returns throughout the cycle.
Dr Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technologies and Chairman of Borouge, said: “Our performance in 2022 clearly reaffirms our core value proposition, which is that we are a highly profitable business focused on high-growth markets with Strong, long-term fundamentals, and industry-leading efficiencies from a well-defined first quartile cost position. Borouge’s highly differentiated innovative products generate a strong premium, delivering solid margins and full cycle Dividend capacity. The company is well-positioned for organic growth and the Board has empowered Borouge to explore opportunities for international expansion. In addition, our sustainability agenda underpins our commitment to decarbonization and the circular economy.”
Borouge 4, a new polyolefin complex under construction by major shareholders ADNOC and Borealis, is currently on schedule and will begin operations in 2025. The new complex is expected to add 1.4 million tonnes of polyethylene capacity, increasing Borouge’s total polyolefins capacity to 6.4 million tonnes per annum. The Borouge Board also empowers the company’s executive management to explore growth opportunities through international expansion.
In February 2023, Borouge announced its full-year financial results, showing strong year-over-year sales growth, driving revenue up 8.2% to $6.7 billion. Despite the challenging operating environment, the company’s full-year net profit was US$1.4 billion, in line with market expectations. Borouge has a strong balance sheet, with a year-end cash balance of more than $1 billion, providing ample room for growth.
Borouge also reported overall capacity growth of 10% year-on-year in 2022, with the successful commissioning of its PP5 unit adding a significant capacity increase of 500kg per annum, bringing more differentiated grades to the production mix and supporting quality production. The company continues to operate comfortably within the top quartile of the global cost curve.
Borouge’s high-impact value-add program focuses on improving efficiencies in variable costs, fixed costs and revenue growth, and is expected to generate a positive EBITDA impact of USD 400 million in 2023. Management expects to maintain a positive EBITDA impact of 15% from 2024, compared to the 2022 baseline.
Borouge expects steady growth in demand in its core Asia-Pacific and Middle East markets, where economic growth rates are ahead of advanced economies. Northstar’s technology, innovative capabilities and integrated approach to market support the company’s differentiated product portfolio, resulting in a sustained and strong market position. With an extensive market footprint covering 49 countries, Borouge is positioned to capitalize on opportunities in a dynamic market environment. The company expects to continue to deliver healthy premiums and reiterated its cycle guidance of $200 per tonne for polyethylene and $140 per tonne for polypropylene.
Borouge’s sustainability goals focus on achieving a zero-waste circular economy, aligned with strong and concerted action by governments, businesses, consumers and society. In support of ADNOC and the UAE’s ambition to achieve net-zero emissions by 2050, Borouge has established decarbonization targets for 2030, which include a 100% reduction in continuous combustion, a 25% reduction in greenhouse gas emissions intensity, and A 30 percent reduction in energy intensity, both based on the 2018 baseline.
In addition to decarbonisation, Borouge is building industry leadership in the circular economy. The company’s circular approach focuses on four key areas: growing its durable product portfolio, expanding its recycled product portfolio, developing fully recyclable packaging solutions, and increasing sales of consumer solutions that support the circular economy. Borouge has established a Packaging Center of Excellence and Circular Economy Team to drive a circular economy for zero-waste plastics, and the team is developing partnership opportunities with recycling companies in Asia and the Middle East.
Borouge has 12 partnerships with leading recycling companies in 7 countries to serve customers in its key markets. These partnerships enable Borouge to expand its recycled product offering to meet the growing demand for sustainable polyolefin solutions and drive recycling along the value chain. The company has significantly increased its recycled polyolefin product offering, offering more than 50 grades in 14 product lines.
As part of its commitment to invest in a greener future and a more sustainable planet, Borouge has invested over US$20 million in Anteo, a family of linear low density polyethylene grades for the global packaging market, enabling fully recyclable monomaterial packaging . It has also invested $5 million to increase the capacity of infrastructure solutions for further sustainable applications.