The year 2024 has proven to be an exceptional one for Borouge Plc, a leading petrochemicals company based in Abu Dhabi, UAE. With a stellar 24% year-on-year increase in net profit, reaching $1.24 billion, Borouge stands out as a beacon of productivity, innovation, and strategic growth in the global petrochemicals landscape. This blog post delves into the key facets of Borouge’s success story, exploring the strategic initiatives and innovative practices that propelled the company to its outstanding financial achievements.
Driving Growth Through Strategic Excellence
In a challenging global economic climate, Borouge has distinguished itself by achieving record production and sales volumes. This success is attributed to the company’s unwavering commitment to operational excellence and strategic positioning in high-growth markets. Borouge's international marketing network and the leverage of world-class technology have enabled the company to innovate continuously, providing products that meet evolving customer demands.
Borouge’s strategic focus on operational excellence is evident in its record production of 5.2 million tonnes. The company achieved exceptional utilization rates of 110% for polyethylene and 98% for polypropylene. These figures underscore the effectiveness of Borouge’s operational strategies and its ability to maximize productivity and efficiency. Furthermore, sales volumes reached an unprecedented level of 5.3 million tonnes, supported by a robust international network of 14 sales and marketing offices.
Leveraging Market Leadership
Borouge has strategically positioned itself in high-growth markets across Asia, the Middle East, and Africa. This strategic positioning has been a pivotal factor in the company’s ability to drive sales growth and outperform industry peers. The company’s strong customer relationships and deep understanding of market dynamics have enabled it to capture significant market share and command high price premiums for its differentiated products.
The company’s high-value infrastructure solutions segment, which accounted for 40% of total sales volume in 2024, underscores Borouge’s strong positioning in key high-value segments. The Asia Pacific region, in particular, emerged as the top destination for Borouge’s products, accounting for 63% of total sales volumes for both the quarter and the full year.
Financial Performance and Profitability Metrics
Borouge’s financial performance in 2024 has been nothing short of impressive. The company achieved an EBITDA margin of 41% for the full year, significantly surpassing global industry peers. EBITDA climbed by 14% year-on-year to $2.48 billion, driven by a 4% year-on-year revenue increase to $6 billion. This financial performance reflects the company’s ability to maintain strong profitability metrics amidst global challenges.
The company’s prudent cost management practices have been instrumental in driving efficiency across its operations. A successful Value Enhancement Programme completed in 2023, along with a comprehensive digital and AI transformation programme, has enabled Borouge to maintain fixed costs at 2023 levels. These initiatives have supported the company’s focus on continued operational efficiencies and cost optimization.
Sustained Dividend Payouts
Borouge’s outstanding performance and robust liquidity position have enabled the company to maintain consistent dividend payouts. In April 2025, the company plans to distribute a final dividend of 7.94 fils per share, bringing the total full-year 2024 dividend payout to $1.3 billion. This commitment to shareholder returns is a testament to Borouge’s solid financial fundamentals and strong cash generation capabilities.
The company produced full-year adjusted operating free cash flow of $2.31 billion, reflecting a 17% year-on-year increase. With a high cash conversion rate of 93% in 2024, Borouge has demonstrated its ability to generate substantial cash flow, further reinforcing its financial strength and resilience.
Pioneering Growth Through Innovation and Technology
Innovation is at the core of Borouge’s growth strategy. In 2024, the company introduced nine new high-performance products across key sectors, including packaging, infrastructure, healthcare, and post-consumer recycling. These innovative solutions are designed to tackle critical global challenges such as climate change, food waste, and access to fresh water, reinforcing Borouge's commitment to driving positive environmental and societal impact.
Borouge’s digital and AI transformation programme has played a crucial role in enhancing productivity and reimagining operations. The company delivered $573 million in value generation through these initiatives in 2024, exceeding its $550 million target announced last year. By integrating cutting-edge AI research and innovation into its processes, Borouge is redefining efficiency and sustainability across its operations.
Strategic Partnerships and Sustainability Initiatives
In the fourth quarter of 2024, Borouge signed a strategic partnership with the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI). This collaboration aims to elevate Borouge's operations by leveraging MBZUAI’s expertise in AI to enhance efficiency, sustainability, and overall value creation. Such strategic partnerships underscore Borouge’s commitment to harnessing technology for long-term growth and industry leadership.
Borouge continues to advance its sustainability and net-zero agenda. The company achieved a remarkable GHG abatement milestone in 2024, reducing more than 500 KtCO2eq annually since the start of its decarbonization journey in 2018. Borouge’s ambitious goals for 2030 include reducing greenhouse gas emissions intensity by 25% and achieving net-zero emissions by 2045.
Outlook and Future Prospects
Looking ahead, Borouge remains committed to driving differentiation and achieving premiums over product benchmarks through the cycle. The company’s management guidance for premiums over product benchmark remains at $200 per tonne for polyethylene and $140 per tonne for polypropylene. With average selling prices expected to improve in Q1 2025, Borouge is well-positioned to sustain its growth trajectory.
The Borouge 4 strategic expansion project is set to transform the UAE’s industrial landscape, making Borouge the world’s largest single-site polyolefin complex. This ambitious project will increase the company’s production capacity by 28% and generate annual revenue of $1.5 to $1.9 billion. Borouge is also exploring opportunities to expand its global footprint, with an ongoing feasibility study of a specialty polyolefins complex in Fuzhou, China.
Commitment to Shareholder Value
As Borouge enters a period of accelerated growth, the company remains fully committed to generating attractive shareholder returns. The company’s strong financial performance in 2024, coupled with its robust growth strategy, positions Borouge as a leader in the petrochemicals industry. With a focus on innovation, sustainability, and strategic expansion, Borouge is poised to continue its remarkable journey of growth and value creation for its stakeholders.
Borouge Plc’s outstanding 2024 financial results are a testament to the company’s strategic excellence, innovative capabilities, and unwavering commitment to operational excellence. As the company embarks on its journey of accelerated growth, it continues to set new benchmarks in the global petrochemicals industry, reinforcing its position as a leader in delivering differentiated solutions and driving positive environmental and societal impact.
