Adsale Plastics Network recently caught up with Rainer Hoefling, CEO at Borouge Pte Ltd., to discuss the sustainability and market trends he is seeing in China. Our discussion took place at a ceremony in Ningbo where Borouge signed a Memorandum of Understanding (MOU) with two local companies to develop a feasibility study on effective local
waste-to-recycling and
closed-loop eco-system to address municipal plastic waste management.
Borouge signed a MOU with two local companies to develop a feasibility study on effective recycling at Ningbo, China.
Diversification and partnership drives sustainability
“China is one of the most advanced countries in sustainability and circularity. The country is promoting sustainability, which is exactly what we have on our strategic agenda,” said Hoefling.
When it comes to driving the sustainability agenda of China,
Borouge contributes with different
polyolefin solutions. The company’s sales volume has more than 20% contribution from new products, a result of the ongoing focus on innovation and the continued development of recyclable and sustainable solutions.
Borouge focuses on diversified industries to tackle different sustainability challenges. “For example,
green energy transition is progressing strongly in the country, and Borouge can support this trend with solutions,” he explained.
“We made a significant contribution to one of China’s first and largest wind High-Voltage Direct Current (HVDC) transmission projects, which supplies electricity to 140,000 households.”
Rainer Hoefling, CEO at Borouge Pte Ltd.
In the sector of advanced
packaging, Borouge works together with brand owners, convertors and machine manufacturers to offer solutions for food security and circular economy.
“We emphasise design for recyclability, getting away from multi-material packaging to mono-material solutions for full circularity,” said Hoefling.
He also underlined that partnerships such as the collaboration on circular economy in Ningbo is crucial for Borouge’s sustainability strategy.
“We focus on deep cross-value-chain partnership, especially on the recycling side” he remarked. Cooperation and full collaboration across the entire value chain is critical if we are to achieve our long-term sustainability and
circular economy goals.”
Borouge works together with partners across the value chain on sustainable packaging and circular economy.
Resilient company in resilient Chinese market
Global polyolefin consumption is about 200 million tonnes in which China accounts for a significant 40% share.
“The Chinese market, for us, is one of the most important markets. When we talk about the difficult market environment in 2022 and 2023, we have to know that China is still growing though with a slower growth rate,” said Hoefling.
“China is resilient, we are already seeing positive signs in the infrastructure segment as the result of government support. At the same time, trends such as urbanisation and green energy will also boost infrastructure projects,” he said.
Therefore, one of Borouge’s core growth strategies in China is expanding its
pipe and wire & cable businesses to further support the country’s infrastructure building and green energy transition.
Borouge contributes to offshore wind projects by providing high quality polyolefin compounds.
The relocation of its Asia North headquarters to Hongkou District, Shanghai, also shows Borouge’s commitment to the Chinese market. The North Bund area has attracted many multinational companies to set up their regional offices there.
“On top of our expansion plan in the UAE, we have an agenda for international growth. We are looking into the potential of international expansions to increase our presence in the core territories,” said Hoefling.
Hoefling pinpointed that Borouge is resilient in a volatile market environment thanks to an all-round product portfolio for diversified applications. This is further supported by a high reliable operation, with utilisation rates are 101% on
PE and 97% on
PP for the company during 2023..
Hoefling also commented that technological know-how and innovation capability, a strong footprint of logistic hubs in China, and a business model of selling direct (more than 80% of products go to customers directly) are the factors that ensure resilience.
India presents huge growth potential
With 36% of its global sales coming from its infrastructure business, Borouge reported an increase of 16% in net profit for Q4 2023 versus the same period in 2022.
“We are outperforming the industry,” said Hoefling. “This is based on good reliability of our assets, diversification in segments, but also diversification in countries,” said Hoefling.
Hoefling explained that Borouge core region represents 85% of the global growth and 68% of the global demand for polyolefins. Borouge has an excellent Business set up with high agility to place volumes strategically and tactically in high net back regions.
In addition to China, he named India as a market with significantly high growth potential. “The absolute volume is not comparable to China, but India has huge potential with a growth rate of 6-8%.” He also mentioned that Indonesia and Vietnam are on the growth list in the Asia-Pacific region.
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