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Business Overview

The Chemicals & Materials segment was established at the beginning of 2021, following the acquisition of the majority stake in Borealis at the end of 2020. OMV substantially grew its chemical business and extended the value chain into polymers with this acquisition. Through its subsidiary Borealis, OMV is now one of the world’s leading providers of advanced and circular polyolefin solutions and a European market leader in base chemicals, fertilizers, and plastics recycling.

The segment comprises base chemicals production integrated with the refineries in Austria and Germany operated by OMV; the Borealis business of base chemicals, polyolefins, and fertilizers; and the joint ventures Borouge and Baystar. With a strong European footprint and activities through Borealis and its two joint ventures, Borouge (with ADNOC, based in the and Singapore) and Baystar (with TotalEnergies, based in the United States), the Group is active in over 120 countries.

Base chemicals

Base chemicals are building blocks for the chemical industry and are transformed into plastics, packaging, clothing, and many other consumer products.

While the OMV-operated steam crackers in Schwechat and Burghausen mainly use naphtha as a feedstock, the steam crackers operated by Borealis in Stenungsund and Porvoo feature high feedstock flexibility and are able to use naphtha, butane, ethane, propane, or LPG mix as feedstock. In Kallo, Borealis runs a propane dehydrogenation unit based on 100% propane feedstock.

OMV Group produces base chemicals such as olefins (ethylene and propylene), aromatics, butadiene, high-purity isobutene, benzene, phenol, and acetone.

  • Olefins (ethylene and propylene) are important chemical building blocks to produce, among other things, polyolefins (polyethylene and polypropylene), which are in turn used to manufacture a wide variety of consumer and industrial products.
  • Aromatics such as benzene are used as starting materials for consumer products, including clothing, pharmaceuticals, cosmetics, computers, and sports equipment.
  • C4s (e.g., butadiene, butenes) are used in a variety of applications, with butadiene primarily used in manufacturing synthetic rubber, making it a fundamental material for the tire and automotive industries. Butenes are used in specialty chemicals, such as oxo-alcohols for plasticizers and as polyols for coatings and synthetic lubricants.
  • High-purity isobutene is a feedstock for key chemical products like adhesives, lubricants, and vitamins.
  • Phenol and acetone are sold mainly to the polycarbonate and epoxy resin industries. Phenol is also used in phenolic resins and in caprolactam. Acetone is also an ingredient in solvents and MMA for PMMA (plexiglass).

In general, the 2021 market environment for base chemicals was characterized by a recovery from COVID-19, bad weather conditions in the US Gulf Coast region, and logistics constraints throughout the whole year.

In comparison to 2020, high feedstock prices drove prices for base chemicals upwards in 2021 and did not negatively impact indicator margins. In Q1/21, margins remained at 2020 levels, but strongly recovered for all products from Q2/21 onward. This development was attributable to overall robust base chemicals demand in all derivates and received particular support from continued strong global demand in polyolefins. Propane dehydrogenation (PDH) margins remained at a satisfactory level, despite increasing propane prices, as the demand for propylene remained elevated. In the second half of 2021, ethylene and propylene indicator margins remained at high levels. Toward the end of the year, contract prices reached all-time highs due to strong demand and a tight supply amid high power and natural gas prices.

Butadiene indicator margins also improved again in Q2/21, reflecting a recovery in the automotive sector. However, recovery was limited due to supply chain constraints, in particular regarding the availability of semiconductor chips. It was mainly the weak Asian demand that negatively impacted butadiene margins in the last quarter of 2021.

Demand for benzene was healthy throughout the year. Prices, and consequently margins, showed high volatility, mainly on account of supply/demand balances. Due to weather events in the United States and unplanned plant outages, peak margins were reached in Q2/21. Despite a weak fourth quarter, the average indicator margin for benzene in 2021 by far outpaced levels seen in 2020.


Following the acquisition of the majority stake in Borealis, OMV Group extended its value chain to polymers and became one of the world’s leading providers of advanced and circular polyolefin solutions. Through Borealis, the Company is the second largest polyolefin producer in Europe and among the top ten producers globally.

Borealis operates seven polyolefin plants located in Schwechat, Stenungsund, Porvoo, and Burghausen, where they are integrated with steam crackers, as well as in Beringen and Kallo, where they are integrated with the existing PDH facility, and in Antwerp. In addition, Borealis operates several compounding plants in Europe, the United States, South Korea, and Brazil.

The value-add polyolefin products manufactured by Borealis are the foundation of many valuable plastics applications that are an intrinsic part of modern life. Advanced Borealis polyolefins have a role to play in saving energy along the value chain and promoting more efficient use of natural resources. Borealis works closely with its customers and industry partners to provide innovative plastics solutions that create value in a variety of industries and segments. These solutions make end products safer, lighter, more affordable, and easier to recycle. In short: They enable more sustainable living. Borealis offers advanced polyolefins for virgin and circular economy solutions, servicing the following key industries: consumer products, energy, healthcare, infrastructure and mobility.

In 2021, margin development in the polyolefins industry was affected by high demand and limited supply. Toward the end of 2020, demand had started to improve, following government economic policies meant to stimulate the economy after COVID-19 containment measures. This trend continued in 2021, where margin development in the polyolefins industry was affected by high demand paired with limited supply. These supply/demand imbalances were caused by a combination of multiple factors. At the end of 2020, force majeure caused multiple EU producers to halt operations at a time when stock levels are normally kept low for the year-end, resulting in pressure on customers. Furthermore, the situation worsened at the beginning of 2021 due to three key factors. Firstly, a number of plants paused their operations to perform routine maintenance, which in many cases was rescheduled from 2020. Secondly, an unprecedented winter storm impacted polyolefin production capacity in the US state of Texas. Thirdly, logistics constraints restricted the ability to redirect volumes toward imbalanced markets.

The above-mentioned capacity constraints, combined with disruption in the shipping industry, exacerbated supply scarcity throughout Q2/21, until eventually imports – mainly from the Middle East – started increasing, offering some relief to the market.

From Q3/21 onwards, new dynamics continued to impact the market. A sudden feedstock, material, and utilities cost increase, as well as the spread of new COVID-19 variants, followed by subsequent containment measures, led to high levels of market uncertainty.

The Borealis polyolefins segment was able to continue serving its customers successfully throughout this period, offering high-quality products and a highly secure supply.

Renewables and circular chemicals

Plastics continue to play a vital role in the economy and in our business, making our life more efficient, convenient, and safe. Yet, when insufficient effort is made to recover and reuse plastics, most of them end up in landfills. The vision of a circular economy – where we optimize resource efficiency and reuse, recycle and re-purpose endlessly – is both a business imperative and an opportunity. Demand for recycled plastics is growing due to increasing public awareness of the importance of using resources sustainably for a climate-neutral future.

The circular economy opens up new ways to reinvent the economy in the interest of preserving natural capital and minimizing waste. OMV and Borealis are pursuing various initiatives in mechanical and chemical recycling, design for recycling (DfR), and circular polyolefins, manufactured with second generation renewable feedstock. While mechanical recycling has proven to be effective and will likely remain the eco-efficient method of choice in the foreseeable future, chemical recycling will play an increasing role to complement mechanical recycling.

Early 2021, Borealis and TOMRA announced the operational start of their advanced mechanical recycling demo plant in Lahnstein, Germany. This is a state-of-the-art plant that processes both rigid and flexible plastic waste from households. The purpose of this demo plant is to generate high-quality material fit for use in highly demanding applications. Technical success will set the groundwork for a commercial-scale advanced mechanical recycling plant.

To expand and accelerate its chemical recycling activities, Borealis took a minority stake in Renasci N.V., a provider of innovative recycling solutions and creator of the novel Smart Chain Processing (SCP) concept. The SCP concept is a proprietary method (EP patent application approved) of maximizing material recovery to achieve zero waste. As part of the agreement, Borealis will source a projected 20 kt of circular pyrolysis oil annually from Renasci’s Oostende facility to produce chemicals and polyolefins based on chemically recycled feedstock. The Group also plans to purchase mechanically recycled material. Borealis will collaborate closely with Renasci to advance and scale-up the SCP technology. This includes developing facilities which operate entirely on household waste as feedstock.

In December 2021, OMV took a major step in scaling up its chemical recycling capacities by making the final investment decision to build a chemical recycling demo plant based on its proprietary ReOil® technology. The plant has a capacity of 16,000 p.a. The feedstock will consist mainly of polyolefins and will be sourced in Austria in close cooperation with local waste management companies. Examples of such plastic waste include food packaging, plastic cups, lids from takeout coffee, and confectionery packaging. This is OMV’s next step toward an industrial-scale plant with a processing capacity of up to 200,000 t/year planned for 2026.

Fertilizers, melamine, and technical nitrogen products

OMV, through its subsidiary Borealis, is a leading European manufacturer and distributor of fertilizers, technical nitrogen products, and melamine: The Company is Europe’s third largest nitrogen fertilizer manufacturer and the world’s third largest melamine producer by production capacity utilized. Borealis produces and then distributes and supplies fertilizers and technical nitrogen products each year via its commercial organization, Borealis L.A.T. This comprises more than 60 warehouses across Europe and has an inventory capacity of over 700,000 t.

In 2020, OMV Group announced that it had started the divestment process for the nitrogen business unit, which includes fertilizers, technical nitrogen, and melamine. The Company’s share (77.5%) in Rosier, which operates the production sites in the Netherlands and Belgium, is not being considered in this sales process. In February 2022, Borealis received a binding offer from EuroChem for the acquisition of its nitrogen business.

Joint ventures


Established in 1998, Borouge is a true success story of the long-term partnership with ADNOC. The joint venture has successfully combined the leading-edge Borstar® technology with competitive feedstock and access to growing Asian markets.

Through Borouge, the Group’s footprint reaches all the way to the Middle East, the Asia-Pacific region, the Indian subcontinent, and Africa. Production company Borouge ADP (Borealis 40%, ADNOC 60%) is based in the United Arab Emirates, while Borouge PTE, which handles sales and marketing (Borealis 50%, ADNOC 50%), is headquartered in Singapore. The company employs over 3,000 people, serving customers in 50 countries.

In 2021, Borouge recorded another successful year of production, optimizing operations with the available feedstock. Continued focus on innovation and commercial excellence, supported by an elevated market price environment, enabled Borouge to achieve higher prices compared to 2020.

Baystar (Borealis 50%, TotalEnergies 50%)

Baystar is a joint venture between TotalEnergies Petrochemicals and Refining USA, Inc. (TEPRI), a wholly owned subsidiary of TotalEnergies SE and Novealis Holdings LLC (Novealis), a wholly owned subsidiary of Borealis AG.

TotalEnergies contributed its award-winning Bayport facilities to the JV and will be the operator of the cracker in Port Arthur. Borealis brings its proprietary Borstar® technology to North America for the first time along with the Bayport site for unique polyethylene grades for the most demanding applications.

Baystar achieved a record net profit in 2021 supported by favorable market conditions. The record result was achieved despite the negative impact from winter storm Uri, which hit Texas in February 2021, resulting in overall lower sales and production volumes compared to previous years. Baystar’s readiness efforts have progressed through the year as the Baystar organization prepares to become a fully integrated 1 mn t polyethylene company with the start-up of the ethane cracker and Borstar Bay 3 plant.

Growth projects

Despite the ongoing adverse effects of the pandemic, Borealis has been able to make meaningful progress on its important global growth projects in the Middle East, North America, and Europe in 2021.

Borouge’s fifth Borstar polypropylene plant (PP5) was started up successfully in February 2022. It increases Borouge’s current production capacity to around 5 mn t/year. Despite COVID-19-related disruptions, the project was completed on time and without cost overruns.

In November 2021, Borealis and ADNOC signed a USD 6.2 bn final investment agreement to build the fourth facility at the Borouge polyolefin manufacturing complex in Ruwais (UAE). Borouge’s expansion is vital for serving growing customer demand for differentiated polyolefins solutions in energy, infrastructure, and advanced packaging in Asia, Africa, and the Middle East. After completion of the Borouge 4 expansion, Borouge will be the world’s largest single-site polyolefin complex. Cutting-edge technologies will be employed to improve energy efficiency and reduce emissions. The plan is to eliminate continuous flaring altogether. The new facility will draw on renewable energy sources to power some of its operations. An exploratory study currently underway will determine whether the installation of a carbon capture unit could lower Borouge 4 emissions by up to 80%.

In the state of Texas in the United States, the Baystar™ growth project will add more than 1 mn t of annual polyolefin production capacity and, most crucially, enable Borealis to supply locally manufactured Borstar products to its North American customers for the first time. The unusually hard winter freeze that hit the region in 2021 had adverse effects on nearly all petrochemical operations on the Texas Gulf Coast, and the Baystar project was no exception. While start-up of the new ethane-based steam cracker has been delayed, on-site construction of the polyethylene unit is continuing apace.

The new world-scale PDH plant under construction in Kallo (Belgium) adjacent to the existing PDH facility, it is planned to begin operations in 2023 . With an investment of around EUR 1 bn, this is among the largest projects in the petrochemical industry in Europe today, and the largest ever for Borealis on the continent. A stellar safety record has been achieved despite the enormity of the project, which includes delivery of one of the largest single pieces of equipment ever shipped in one piece to the Port of Antwerp.

In July, Borealis announced it had acquired a 10% minority stake in Renasci N.V., a Belgium-based provider of innovative recycling solutions and creator of the novel Smart Chain Processing concept. This purchase was subsequent to an earlier offtake agreement with Renasci to source around 20 kt per year of circular pyrolysis oil, a product of chemical recycling which can be used as feedstock. Taken together, the agreements help accelerate the shift to plastics circularity in an eco-efficient way.

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