Guangzhou, China — Singapore polyolefin supplier Borouge Pte. Co., Ltd. is investing in professional-grade polyethylene to meet Asian demand for higher quality pipes, including responding to China’s upgrade of its water pipe standards.
CEO Wim Roels declined to disclose investment details, but the company press release stated that this is a “significant” increase in the production capacity of pre-blended black PE resin for pressure pipe applications in the Asian market and will be completed next year.
Roels said in an interview at Chinaplas in Guangzhou from May 21 to 24 that the investment will be made at the company's plant in Ruwais, United Arab Emirates.
He said that the China Water Standards Committee passed new regulations for PE pipes last year, which will promote the use of pre-mixed materials. He said that the new capacity also targets Africa, the Middle East and other regions in the Asia-Pacific, including the Indian subcontinent, Southeast Asia and Australia.
"The country is moving," he said. "China has now decided to use pre-mixed black materials in water pipes.
"This will improve the quality of the pipe," Roels said. "Finally, we believe that ensuring the quality standards of the pipeline is crucial. If you put the pipeline underground, it should be able to be used there for more than 50 years, up to 100 years."
He said that the adoption of higher standards like China is important to the company's market development, because if there are no stricter rules, pipeline infrastructure "always have cheaper solutions." But he said that inferior pipes may leak water, and if it is gas, it will cause an explosion.
"This is an increase in standards and an increase in quality requirements. I believe this is the right approach in the long run," Rawls said. "Like China, we are the first to support the formulation of new standards. Substandard pipelines are very dangerous to society and the industry.
"We have been the first to adopt clarinet and premixed tubes as solutions in these countries," he said. "This is the position we want to maintain, and we want to develop further."
Roels said that most of Borouge's business in China is targeting domestic markets such as pipelines and has performed well.
He said that the automotive industry is struggling, and some of Borouge’s export-oriented customers are being squeezed by the trade conflict with the United States, but overall Borouge’s market in China is in good condition.
"Overall, we still think this business is pretty good," he said. "So far, we have seen that most of the companies we serve are actually doing very well. They are more domestically oriented, and domestic demand has not changed much at all."
He said that even if China's economic growth slows to 5% or 6%, as the world's second largest economy, this is still "large-scale" growth.
Shortly after Borouge announced the expansion of its petrochemical complex in Ruwais, it announced an increase in pipeline material production capacity, including the world's largest mixed raw material cracker, with a production of 1.8 million tons of ethylene.
Borouge is a joint venture between Borealis and Abu Dhabi National Oil Company, headquartered in Vienna, Austria.
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