The company delivered a return on capital employed (ROCE) of 13%, compared to 10% in 2010. Net debt increased by MEUR 84 by the end of December 2011 but the gearing improved to 35%, reflecting Borealis’ strong financial position.
2011 was a year of high volatility with the economic climate improving in the first half of the year only to deteriorate in the second half, due in part to the unresolved sovereign debt crisis. This shift in market sentiment had a profound impact on the European polyolefins industry and resulted in significant margin erosion. As a result, the Polyolefins business segment recorded lower profits in 2011 compared to 2010. The Base Chemicals business segment was less impacted by the change in market sentiment, improving profits compared to 2010 driven by healthy margins and commercial excellence.
Borouge, Borealis’ joint venture with ADNOC, also contributed significantly to Borealis’ annual results through the continued ramping up of its production due to the Borouge 2 expansion.
Borealis’ safety performance, measured by the number of Total Recordable Injuries per million hours worked (TRI), remained world- class, but increased to 1.6 compared to 1.0 in the previous year. Although the severity of injuries was low, any increase in the number of injuries is disappointing. Borealis will continue to work with all employees and contractors to continuously improve the company’s world class safety performance in order to achieve the ultimate objective of an accident free working environment.
Borealis’ joint venture in the Middle East and Asia, Borouge, performed extremely well in 2011. The Borouge 2 expansion project, a highly complex endeavour involving more than 23.000 contractors, a started up in record time and is now fully on stream. In addition, the final contracts for the Borouge 3 expansion project in Abu Dhabi were awarded during the year. This multi-billion dollar investment will further support the growth ambitions of Borouge and Borealis as it will increase Borouge’s total annual production capacity to 4.5 million tonnes of polyolefins. The Borouge 3 expansion will be completed by the end of 2013 and be fully operational in mid-2014.
In 2011, Borealis launched its first polypropylene (PP) grade for one-piece squeezable cosmetics tubes, Borsoft SL600MO. The material was launched as part of a sustainability-focused packaging solution for the cosmetics sector called CLUBE, a one-piece squeezable tube with an integrated closure and in-mould label (IML) that cuts material usage by up to 40%. The company also launched Bormed HE9601-PH, a high density polyethylene (HDPE) for the healthcare market that creates productivity improvements for converters without compromising the packaging performance.
In September, Borealis received the Frost & Sullivan Europe Product Leadership Award in the High Voltage Direct Current (HVDC) Cable Insulation Market - a prestigious recognition of the company’s accomplishments in this sector, where Borealis has played a pioneering role by introducing Borealis Superclean LE4253, a cross-linked polyethylene (XLPE) based insulation compound.
In 2011, Borealis celebrated the groundbreaking of a new semi-commercial catalyst plant in Linz, Austria.