New plastics plants in Abu Dhabi will support the balance sheet of Borealis, the Austrian petrochemical company owned by the Government, as global market conditions remain depressed over the next 18 months, the company's chief said.
As output increases more than seven-fold over the next five years at Borouge, the company's joint venture with the Abu Dhabi National Oil Company (ADNOC), the main challenge will be finding new markets, said Mark Garrett, Borealis's chief executive.
Borouge will be selling its new supply of polyolefins, a raw material in plastics, into a market with an immediate glut of product as a result of other plants starting up in the Middle East, Mr Garrett said.
"We don't expect the economy to pick up until the second half of next year, and in that sense, polyolefins producers are a little worse off ? They're going to have to deal with this new supply coming on. So that's going to be an interesting time over the next 18 months," he said.
Borealis, in which the Abu Dhabi Government's International Petroleum Investment Company (IPIC) has a 64 per cent stake and which produces about 4 million tonnes of chemicals annually at plants in Europe, saw revenues decline in the past two quarters.
The firm lost ?122 million (Dh634m) in the fourth quarter of last year, and ?56m at the beginning of this year.
Mr Garrett said the company hoped to return to profitability this quarter, and had managed to hold its debt level low, with gearing - the ratio of debt to equity - of 47 per cent.
"We went into the recession with a 27 per cent gearing, and some of our competitors ended up after the first months with gearings higher than 1,000 per cent," he said. "We have the benefit of having very long-term-orientated shareholders so they invest with us through the cycles."
Since coming under IPIC's majority ownership in 2005, Borealis has steadily become more important to the Abu Dhabi economy.
The firm is helping IPIC to develop the first stage of the massive Chemicals Industrial City in Taweelah, and earlier this year it agreed with ADNOC to proceed with a third-stage expansion of Borouge to more than double capacity from 2 million to 4.5 million tonnes a year between 2010 and 2014.
A second-stage expansion, known as Borouge 2, is scheduled to be finished by the end of next year. After the third-stage expansion is completed, production in Abu Dhabi will make up a majority of Borealis's output.
"For the next decade, Borouge has become the most important investment that Borealis has in plant and equipment," Mr Garrett said.
Much of the new production will be sold to China and the rest of Asia, where Borouge's marketing arm has developed a strong presence, but Mr Garrett indicated IPIC may capitalise on its recent acquisition of Nova Chemicals, a Canadian firm, to open up markets in North America.
Over the long term, the low costs of Borouge's production, which is fed by cheap ethane derived from natural gas, would offer stability in an otherwise volatile market, he said.
"You don't build a Borouge 2 for the next two years - the thing's going to be there for the next 30 years. So the site will experience a lot of cycles in its existence."
cstanton@thenational.ae
Sunday's Super Four matches
Dubai, 3.30pm
India v Pakistan
Abu Dhabi, 3.30pm
Bangladesh v Afghanistan
Company%20Profile
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The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
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Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
Results:
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
How to protect yourself when air quality drops
Install an air filter in your home.
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Shower or bath after being outside.
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
GROUPS AND FIXTURES
Group A
UAE, Italy, Japan, Spain
Group B
Egypt, Iran, Mexico, Russia
Tuesday
4.15pm: Italy v Japan
5.30pm: Spain v UAE
6.45pm: Egypt v Russia
8pm: Iran v Mexico
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
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Company%20profile
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Difference between fractional ownership and timeshare
Although similar in its appearance, the concept of a fractional title deed is unlike that of a timeshare, which usually involves multiple investors buying “time” in a property whereby the owner has the right to occupation for a specified period of time in any year, as opposed to the actual real estate, said John Peacock, Head of Indirect Tax and Conveyancing, BSA Ahmad Bin Hezeem & Associates, a law firm.
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Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
A Cat, A Man, and Two Women
Junichiro Tamizaki
Translated by Paul McCarthy
Daunt Books
The Travel Diaries of Albert Einstein The Far East, Palestine, and Spain, 1922 – 1923
Editor Ze’ev Rosenkranz
Princeton
UAE currency: the story behind the money in your pockets
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
The specs
Engine: 8.0-litre, quad-turbo 16-cylinder
Transmission: 7-speed auto
0-100kmh 2.3 seconds
0-200kmh 5.5 seconds
0-300kmh 11.6 seconds
Power: 1500hp
Torque: 1600Nm
Price: Dh13,400,000
On sale: now
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now
Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Cargoz%3Cbr%3E%3Cstrong%3EDate%20started%3A%3C%2Fstrong%3E%20January%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Premlal%20Pullisserry%20and%20Lijo%20Antony%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2030%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Seed%3C%2Fp%3E%0A
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5