December 23, 2013

Polymerupdate speaks with Borouge CEO

From L to R: Neeraj Rawal COO & Senior Vice President (Polymerupdate); Feroz Khan Sr. Researcher & Editor (Polymerupdate); Marie
Christin Shenouda Regional Communications Manager Asia South (Borouge); Pushp Raj Singhvi Managing Director (Borouge India); Wim
Roels CEO (Borouge); Anil Krishna GM & VP Sales-ISC (Borouge); Lekhraj Ghai Sr. Researcher & Sr. Editor (Polymerupdate)

During Plastivision India 2013, Borouge, the UAE-based provider of innovative, value creating plastics
solutions conducted a press briefing to present its developments, future investments and its business
strategies in India. The press meet, held at Hotel Trident in Mumbai, India, included presentations from
Wim Roels - CEO Borouge, Anil Krishna - VP (Sales) and General Manager-Indian Subcontinent and
Tarmo Raudsepp - Senior Vice President Asia South.
Wim Roels started the briefing and spoke on Investing in the future, one of the three segments of the
presentation, that showcased Borouges developments and upcoming projects. Wim Roels informed
about the Borouge family that comprises Abu Dhabi National Oil Company (ADNOC), Borouge, Austriabased Borealis and Nova Chemicals. Mr. Roels explained that Borouge is active in the polyolefins
business in Asia, Borealis is mainly active in Europe and Nova Chemicals is active in the Americas and
thus together they have a global reach and can provide polyolefins solutions to their customers all over
the world. The Borouge family also includes International Petroleum Investment Company (IPIC), the
majority shareholder of Borealis and full owner of Nova Chemicals. Mr. Roels said that Borouge is now
focusing on three major industry areas that include infrastructure, the automotive business in which
they are already active in China and the advanced packaging business. Wim Roels outlined the history of
Borouges growth from the 450,000 mt/year Borouge 1 to the 4.5 million mt/year Borouge 3 that is on
track for completion in 2014.
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December 23, 2013

Speaking next at the meet was Anil Krishna the newly appointed General Manager and Vice President
Sales, Indian sub-continent, who spoke on Growing in India and why India is a focus area for Borouge.
Mr. Krishna detailed Borouges presence in India since 1999, its setting up an office in Mumbai in 2012
and its plans to establish a new office in Delhi during the course of 2014. Borouge has also initiated
Water for the World through which it facilitates access to clean water for rural Indian communities.
Mr. Krishna pointed out that the rapid urbanization, growing population, rising middle-class, food
shortage, land degradation and fresh water depletion in India are expected to have an impact on the
industry, particularly the infrastructure, automotive and packaging industries. He stated that India, with
a 6.4 million mt/year demand as of 2012, is the worlds third largest market for polyolefins and the
packaging industry accounts for more than 70% of the polyolefins demand in India. Moreover, Indias
growing focus on renewable energy will see an increase in material substitution from conventional steel
to plastic pipes and in extra high voltage wires and cables for long distance transmissions.
Tarmo Raudsepp then concluded the presentation by speaking on Sustainable plastics solutions and
Borouges intention to provide value creations and innovations in a sustainable manner. He emphasized
the role of People, Profit and Planet in sustainability. Mr. Raudsepp explained that India holds 17% of
the worlds population and only 4% of the worlds water resources. Furthermore, Indias population,
which currently stands at 1.2 billion, is expected to surpass that of China by 2030. Of the available water
resources in India, 70% is used in the agricultural sector, 20% is used in the industry and only 10% is
used for domestic consumption. Borouge aims to reduce the water consumption in the agricultural
sector by promoting and providing pipes for drip irrigation. Drip irrigation has the following advantages
over the conventional furrow and sprinkler irrigation methods: prevents loss of water by evaporation,
requires less power to build pressure and prevents insect infestation and crop diseases. Drip Irrigation is
expected to reduce water usage by 75% and the Government of India is keen on increasing the dripirrigated land in India from a current 2 million hectares to a potential 27 million hectares. Mr. Raudsepp
said that the pipes made by Borouge use five different compounds that are mixed together and last 3-7
times more than conventional pipes. He also listed the advantages of Borouge polyethylene films in
greenhouses and in packaging.
During the press briefing, Polymerupdate representatives had an opportunity to interact with Wim
Roels. Below are a few excerpts from the interview:

On the ongoing expansion at Borouge

Borouge 3 is on track and the project is being given the final finishing touches and is expected to start
very soon. Although we never give out percentages, considering that the project is in the stage of
commissioning to prepare for start-up, it is definitely more than 90% complete. There are 8 different
plants in the project and they will come on-stream one after the other during the course of 2014. By the
end of 2014 all the plants will be up and running and Borouge will be able to supply material from the
new capacity to its customers. Borouge has invested more than USD 10 billion towards the growth of
the company in the last 4-5 years.

Contact Details: 344, A to Z Indl. Estate, G. K. Marg, Lower Parel (w), Mumbai 400013, INDIA
Email: info@polymerupdate.com | Tel: +91-22-61772000 (25 lines) | Fax: +91-22-61772025

December 23, 2013

On whether Borouge plans to start an innovation centre or a research centre in India

Operations at the newly established Innovation Centre in Abu Dhabi have started a month ago. We also
have a Research and Development Centre in Shanghai that has been operational since two years. Till
now, most of the technological know-how has been contributed by Borealis and now that capability will
be built within Borouge to meet Asia-specific demands. We are aware of the potential India has as a
research location with its broad availability of well-educated people and about other Gulf companies like
SABIC being interested in India as a research location. However, we would like to first focus on getting
the already put-up centers in Abu Dhabi and Shanghai operational. We will then evaluate where to put
up the next centre as establishing an innovation or application centre is a big step and is not about just
investing in the hardware but also about getting the software, such as the systems, people and
mindsets, to integrate and work together. At present, Borouge is operating in three major regions:
Middle East, Asia South and Asia North. Middle East includes exports to Africa and Europe. Asia South
covers the Indian peninsula, Southeast Asia and Australia and Asia North covers China and Korea. Being
an Emirati company our first priority is to get the Abu Dhabi Innovation Centre up and running before
discussing our next move.

On the sales and marketing strategy of Borouge

Borouge is a 50:50 joint venture between ADNOC and Borealis. Borouge has a marketing agreement
with Borealis, which means that Borouge is the exclusive agent for all products of Borouge and Borealis
in Asia and East Africa. At the same time, Borealis is the exclusive agent for all the products of Borealis
and Borouge in Europe and West Africa. Thus, Borouge is the meeting point where businesses from
Europe, Middle East and Asia come together.

On the stagnancy in the European market

Europe is going through a difficult phase and its economy is indeed slowing down. The industry in
Europe is undergoing some restructuring to fit into the economy which is why some oil wells are closed.
It will thus take some time for Europe to recover. However, some segments such as consumer packaging
in Europe that are still growing and look interesting. Borouge exports material to Europe through
Borealis and that business is still going strong. On the other hand, certain segments such as
infrastructure in Europe are still lacking owing to the rigid policies of the recession-hit European
countries.

On the African polyolefins market

Although China is growing at a faster rate, the growth in Africa has been steady and Africa is becoming
more and more interesting. We are looking at more development and growth of Borouge in the African
market.

On the shale gas boom in America and its impact on Borouge

At present, shale gas is a North American issue and is likely to remain a North American issue even in the
future. We do not believe that all the forecasts/plans that have been announced in connection with
Contact Details: 344, A to Z Indl. Estate, G. K. Marg, Lower Parel (w), Mumbai 400013, INDIA
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December 23, 2013

shale gas will come through as engineering/construction costs have increased exponentially owing to all
the activity going on due to the shale gas boom. We believe that a significant part of the announced
projects will never be built. Indeed, the shale gas boom will result in a lot of volume creation and the
market in North America will become highly competitive. However, a major portion of the new volume
will be used up in North America itself owing to its increased growth and consumption. Next, some of
the new volume will be exported to Latin America and then there will be some exports to Asia and
Europe; but the amount exported relative to the total growth in Asia will be insignificant, and thus the
shale gas boom is not likely to change the momentum of our business in Asia. Asia will remain a rapidly
growing market and there will be a lot of opportunities for further growth throughout Asia, which
means that Borouge will remain highly active in Asia.
Although, the shale gas boom in North America will not directly impact Borouge, it will definitely impact
the economy and industry and hence in the long term (more than 10 years from now), it may have an
indirect impact on Borouge. However, with the strong integration of Borouge with both its owners,
feedstock-wise with ADNOC and technology-wise with Borealis, Borouge is in a strong position to face
any challenges that might arise due to the shale gas revolution.

On shale gas and coal developments in China

Considering that the main markets for Borouge lie in Asia and Europe, China is very important in the
scheme of things. A shale gas revolution is anticipated in China but it is expected to take time. Shale gas
can be of various forms, from dry methane to wet shale oil. In China, most of the available shale gas is in
the form of methane which will not be useful in the petrochemical industry that uses wet gases such as
ethane and propane. Furthermore, geological development in China will be much more complex than in
North America. Thus, for a shale gas boom in China to really impact the petrochemical business will take
at least 5-10 years.
However, the significant coal-to-olefins development in China is an issue of concern and could impact
our business in China. There is abundant coal stranded in Western China which is extremely difficult to
transport to the eastern parts of China owing to the high costs involved. China is trying to convert that
stranded coal into chemicals, petrochemicals and plastics. This could have an impact on the plastics
market in China as it creates a source of local supply that is based on integrated and competitive
feedstock. Thus in China, coal rather than shale gas is expected to have a bigger impact on the market in
the immediate future.

On the Gulfs prospects as a converting/processing hub

The Gulf market is highly important to us. The converting industry is growing rapidly in Saudi Arabia and
UAE. The Gulf, with its negligible import duties and low taxes, provides an attractive environment and
the converting/processing industry will grow more and more in the Gulf.

On plans of Borouge to invest in manufacturing in India

Borouge has a 50,000 mt/year compounding manufacturing unit in China and may in the future look at
opening such plants in other countries. The growth of a strong middle class in India and the availability
Contact Details: 344, A to Z Indl. Estate, G. K. Marg, Lower Parel (w), Mumbai 400013, INDIA
Email: info@polymerupdate.com | Tel: +91-22-61772000 (25 lines) | Fax: +91-22-61772025

December 23, 2013

of a large, well-educated and trained work force make India an interesting location. Borouge has been
studying the compounding activity in India; however, owing to the less than expected growth in the
automotive industry in India, plans to venture into the manufacturing business in India are currently on
hold. Moreover, Borouge does not aim to become the largest plastics supplier in India but to become a
niche specialty material supplier. Nevertheless, as China is becoming more and more expensive as a
manufacturing location a large number of manufacturers are likely to move out of China to other
locations such as South East Asia and India. However, the significant import duties in India act as a
deterrent; whereas, the import duties in countries like Vietnam are almost zero. Thus, India has a golden
opportunity to attract the exported manufacturing businesses from China if it is able to provide a
feasible investment environment, well-educated labor and access to raw material at competitive prices.
END
For further information, commentary and interviews, please contact Lekhraj Ghai at Polymerupdate on
+91 9967828215 or email lekhraj@polymerupdate.com
About Borouge
Borouge is a leading provider of innovative, value creating plastics solutions. A joint venture between
the Abu Dhabi National Oil Company (ADNOC), one of the worlds major oil and gas companies, and
Austria based Borealis, a leading provider of chemical and innovative plastics solutions, Borouge is a
groundbreaking at the forefront of the next generation of plastics innovation.
With its base in the United Arab Emirates and its Marketing & Sales head office in Singapore, Borouge
employs more than 3,000 people with over 40 nationalities, serving customers in 50 countries across the
Middle East, Asia and Africa.
Building on the unique Borstar and Borlink technologies and over 50 years of experience in
polyolefins, Borouge provides innovative, sustainable and value creating plastics solutions for
infrastructure (pipe systems, and power and communication cables), automotive and advanced
packaging applications that address global challenges such as climate change, food protection, access to
fresh water, energy conservation, healthcare and waste management.
About Polymerupdate
Polymerupdate is Indias leading plastics and petrochemical intelligence provider. For over a
decade Polymerupdate has been a world renowned provider of Petrochemical Market Intelligence
through real time news and price alerts with subscribers based in over 55 countries.
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Contact Details: 344, A to Z Indl. Estate, G. K. Marg, Lower Parel (w), Mumbai 400013, INDIA
Email: info@polymerupdate.com | Tel: +91-22-61772000 (25 lines) | Fax: +91-22-61772025