EXCLUSIVE INTERVIEW
Borealis' executive vice president Polyolefins Alfred Stern talks to Plasteurope.com about the global and European market situation and the company's experiences with “Borstar”
 Alfred Stern (Photo: Borealis) |
As 2012 is drawing to a close, Plasteurope.com spoke to Alfred Stern, executive vice president Polyolefins at Austrian plastics and base chemicals producer Borealis (Vienna; www.borealisgroup.com) and asked him about his take on the shifting global petrochemical market balance, the future of European HDPE production (see also Plasteurope.com of 05.12.2012), and the company’s proprietary “Borstar” technology.
Plasteurope.com: How do you see the global market balance evolving in the next 5-10 years? What role will the different world regions play?
Stern: For years now we have seen the global market balance shift and follow demand, which is strongest in Asia. The key challenge here is to provide the relevant materials, as China still depends on imports to meet its need, a situation that is unlikely to change in the coming years.
Another game changer has been the so-called “shale gas revolution” in the United States. Not only did this prompt an industry-wide change, it also led to many new investments. The US plastics sector has in a way been revived, with a steady flow of new capacities coming on stream in the next years. It still remains unclear how much output will be added and when, but there is no doubt that new capacities are in the making. And all this added output will go towards meeting global demand.
Although studies predict that western European polyolefin growth will average under 2% over the coming years, Borealis still sees the region as filled with opportunities. Our motto is “Value Creation through Innovation”. Low feedstock costs alone do not drive innovation. Instead, it is the result of ongoing efforts to develop new materials. That is what we believe in and what we stand for.
Plasteurope.com: What is your take on the future of HDPE production in Europe, especially with a view to the decision by players like Ineos and Dow to idle some of their European capacities? Do you have any concrete plans for your plant in Burghausen / Germany?
Stern: Right now the market in Europe especially is characterised by oversupply, which in turn is the result of shifts in both feedstock and demand structure. European demand is simply not growing at the rates witnessed elsewhere, and we also had to content with a severe economic crisis, which delivered yet another blow to both demand and growth.
By comparison, Asian demand is rising, with reports predicting that global polyolefin consumption will increase by 65m t in the decade from 2010-2020. The question remains how existing output will be able to meet this rising demand. The key factor here is the regional shift in demand and the possibility of producing HDPE cheaper outside of Europe. This shift still has to be tackled.
It is clear that polyolefin production will have to remain in Europe, not least because of the local industry’s needs. But what is also clear is that the number of imports is rising, and a lot of European demand is increasingly met by material from abroad. This will inevitably lead to a number of consolidations in the future.
Borealis has constantly invested in its plant footprint over the last eight years, true to its policy of “scrap and build”. In fact, many of our European plants have been revamped and boast the latest technological design to ensure the implementation of our technology developments. As a result we have one of the youngest asset fleets of the industry. It is our long-term policy to constantly evaluate our entire plant repertoire to ensure an optimal demand/supply balance and cost competitiveness, but at the moment there is nothing to announce for Burghausen.
Plasteurope.com: A few years ago, Borealis switched from autoclave production to its proprietary “Borstar” technology. What are your experiences to date?
Stern: Our Borstar technology completely lives up to our expectations. The technology is designed for bimodal products and allows for easy processing, and is particularly suitable for applications such as water or gas pipes, whose molecular division cannot be guaranteed to the same extent by autoclave production. Thanks to Borstar, we are in a position to produce complex products more flexibly. I believe the fact that we are increasing our capacity in our Borouge joint venture in Abu Dhabi to more than 4m t/y of materials based on Borstar, is a testimony to the technology’s success.
PIE: Thank you very much for your time.
Plasteurope.com: How do you see the global market balance evolving in the next 5-10 years? What role will the different world regions play?
Stern: For years now we have seen the global market balance shift and follow demand, which is strongest in Asia. The key challenge here is to provide the relevant materials, as China still depends on imports to meet its need, a situation that is unlikely to change in the coming years.
Another game changer has been the so-called “shale gas revolution” in the United States. Not only did this prompt an industry-wide change, it also led to many new investments. The US plastics sector has in a way been revived, with a steady flow of new capacities coming on stream in the next years. It still remains unclear how much output will be added and when, but there is no doubt that new capacities are in the making. And all this added output will go towards meeting global demand.
Although studies predict that western European polyolefin growth will average under 2% over the coming years, Borealis still sees the region as filled with opportunities. Our motto is “Value Creation through Innovation”. Low feedstock costs alone do not drive innovation. Instead, it is the result of ongoing efforts to develop new materials. That is what we believe in and what we stand for.
Plasteurope.com: What is your take on the future of HDPE production in Europe, especially with a view to the decision by players like Ineos and Dow to idle some of their European capacities? Do you have any concrete plans for your plant in Burghausen / Germany?
Stern: Right now the market in Europe especially is characterised by oversupply, which in turn is the result of shifts in both feedstock and demand structure. European demand is simply not growing at the rates witnessed elsewhere, and we also had to content with a severe economic crisis, which delivered yet another blow to both demand and growth.
By comparison, Asian demand is rising, with reports predicting that global polyolefin consumption will increase by 65m t in the decade from 2010-2020. The question remains how existing output will be able to meet this rising demand. The key factor here is the regional shift in demand and the possibility of producing HDPE cheaper outside of Europe. This shift still has to be tackled.
It is clear that polyolefin production will have to remain in Europe, not least because of the local industry’s needs. But what is also clear is that the number of imports is rising, and a lot of European demand is increasingly met by material from abroad. This will inevitably lead to a number of consolidations in the future.
Borealis has constantly invested in its plant footprint over the last eight years, true to its policy of “scrap and build”. In fact, many of our European plants have been revamped and boast the latest technological design to ensure the implementation of our technology developments. As a result we have one of the youngest asset fleets of the industry. It is our long-term policy to constantly evaluate our entire plant repertoire to ensure an optimal demand/supply balance and cost competitiveness, but at the moment there is nothing to announce for Burghausen.
Plasteurope.com: A few years ago, Borealis switched from autoclave production to its proprietary “Borstar” technology. What are your experiences to date?
Stern: Our Borstar technology completely lives up to our expectations. The technology is designed for bimodal products and allows for easy processing, and is particularly suitable for applications such as water or gas pipes, whose molecular division cannot be guaranteed to the same extent by autoclave production. Thanks to Borstar, we are in a position to produce complex products more flexibly. I believe the fact that we are increasing our capacity in our Borouge joint venture in Abu Dhabi to more than 4m t/y of materials based on Borstar, is a testimony to the technology’s success.
PIE: Thank you very much for your time.
17.12.2012 Plasteurope.com [224096-0]
Published on 17.12.2012