25 Jun – Borouge boosts pre-compounded PE capacity for Asian pipe markets
Singapore-based polyolefin supplier Borouge Pte. Ltd. is making investments in specialized grades of polyethylene to meet demand for higher-quality pipe in Asia, including in response to China upgrading its water pipe standards, said Plasticsnews.
CEO Wim Roels declined to release details of the investment, but a company news release said it was a "significant" increase in capacity for specialized precompounded black PE resin for pressure pipe applications for Asian markets and would be completed next year.
In an interview at Chinaplas, held May 21-24 in Guangzhou, Roels said the investment will come at the company's facility in Ruwais, United Arab Emirates.
He said China's Water Standards Committee last year adopted new rules for PE pipe that will promote the use of precompounded materials. The new capacity is also targeting Africa, the Middle East and other parts of Asia-Pacific, including the Indian subcontinent, Southeast Asia and Australia, he said.
"Countries are moving," he said. "China has now decided to use precompounded black material for water pipe.
"This will improve the quality of pipe," Roels said. "At the end, we believe it's crucial to secure quality standards for pipe. If you put pipe in the ground, it's supposed to be there for 50 years plus, up to 100 years."
He said the adoption of higher standards as China has done is important for the company's market development because without more stringent rules, "there are always cheaper solutions" for pipe infrastructure. But he said lower-quality pipe can leak water or, in the case of gas, cause explosions.
"This is a raising of the standard, a raising of the quality requirements, which I believe long term is the right thing to do," Roels said. "We are leading support to this development of new standards like China did. Substandard pipe is very dangerous for society and for the industry.
"We have been pioneering in these countries black pipe, precompounded pipe as a solution," he said. "That's a position we want to maintain and we want to further develop."
Roels said most of Borouge's business in China that targets the domestic market, like pipe, is doing well.
The automotive sector is struggling and some of Borouge's export-oriented customers are pinched because of the trade conflict with the United States, but in general the market in China is in good shape for Borouge, he said.
"Overall, we still see the business is quite good," he said. "So far we see that most of the businesses we are serving are actually doing quite OK. They're more domestic, and domestic demand fundamentally has not changed very much."
Even with China's economic growth slowing to 5 or 6 percent, as the world's second-largest economy, that's still "massive" growth, he said.
The announcement of added capacity for pipe materials comes shortly after Borouge announced an expansion of its petrochemical complex in Ruwais, including what would be the world's largest mixed-feed cracker with an ethylene output of 1.8 million metric tons.
Borouge is a joint venture of Vienna, Austria-based Borealis AG and the Abu Dhabi National Oil Co.