Investment Case

Investment Case

  • We are a leader in premium solutions in a robust industry environment

    As a leader in premium polyolefin solutions, our sales volume in the Consumer Solutions and Infrastructure segments totaled 2.5 million tons (59%) and 1.7 million tons (41%), respectively, in 2021 (excluding sales to the mobility and healthcare industries). During the same period, our polymer products were mainly sold across Asia (59%) and the Middle East and Africa (33%), with 9% sold to other international markets. With growing global demand expected to exceed supply from 2022 to 2026, we are well-positioned to meet demand and target the largest and fastest growing geographies.

  • We own and operate a highly attractive polyolefins production platform

    We have increased our production capacity by 10x from 2001 to Q1 2022 to reach 5 million tons, with all expansion projects completed on time and on budget. Meanwhile, we operate a young and well-maintained asset base with limited maintenance capital expenditure levels, which further enhances our production capacity. In 2021, our overall asset reliability run-rate was 96%.

    Combined with our advantageous long-term feedstock supply contract with ADNOC, and Borealis’ proprietary Borstar® technology, these factors position us within the first quartile of the global cost curve.

  • Innovation, technology and direct access to target markets

    Our shareholder Borealis’ proprietary technology enables our industry-leading innovation capabilities. For 20 years, we have leveraged our relationship with Borealis, including access to Borstar® technology, technical know-how, innovation capabilities, exchange of in-depth knowledge and best practices on commercial and operational excellence.

    Borstar® technology allows for the production of tailored solutions to fulfil the specific needs of our customers. This supports our focus on premium price end-markets through a differentiated product offering. We have a team of approximately 100 research and development personnel, including scientists and researchers, and over 20% of our sales volume in 2021 was generated by products that were less than 5 years old.

    Borouge owns and operates one of the world’s largest integrated polyolefin complexes in Ruwais, UAE, with a diverse regional footprint of logistics hubs in the UAE and nine international locations. In addition, we operate warehouses and gateways across MENA, Europe, and Asia, which provide an extensive direct sales network covering approximately 85% of sales volumes.

  • Our superior products yield premium prices

    We regularly review our product portfolio, including segmentation and differentiation, assessing a range of factors including the premium above benchmark achieved, market opportunity, technical complexity and entry barrier. We define differentiated products as those having high technical performance, high entry barriers, high premium (above $100 per ton) and high growth market opportunity.

    We estimate that approximately 80% of our polyolefin products are differentiated. This has been achieved through our integrated go-to market approach driving customer value-add, our use of Borstar® technology and continued strive for innovation.

  • Robust financial profile

    The combination of our market-leading position, diversified global footprint, operational excellence and strong cost discipline has enabled us to enjoy strong operating profitability and cash flows.

    We have achieved consistently high levels of profitability and cash flow generation, with revenue in 2021 of $5.5 billion (vs. $4.1 billion in 2020); a pro forma cash conversion ratio of 91%; and operating free cash flow of $2.4 billion (vs. $1.4 billion in 2020). During 2021, we also managed to reduce our capital expenditure to $252 million for the year (vs. $383 million in 2020).

    Our proforma adjusted EBITDA for 2021 was $2.7 billion and our proforma adjusted EBITDA margin for the 12-month period was 44%.