Locations / Sites

Management Report

Safety Performance

In 2020, Borealis reported a Total Recordable Injuries (TRI) frequency per million working hours of 1.7. While this TRI falls short of the goal set by Borealis itself, and is a deterioration versus the 1.6 recorded in 2019, a TRI frequency of less than two is considered world-class in the industry. Due to operational issues at the cracker in Stenungsund, Sweden, at fertilizer plants in France and due to the challenges resulting from the coronavirus, the safety performance failed to reach the target levels. Borealis is not satisfied with these results and has bolstered its commitment to both occupational and process safety in order to achieve the ultimate goal of zero injuries. Safety is and remains the number one priority at Borealis.

As a responsible company, Borealis will continue to take all possible steps to help stop the spread of the coronavirus and protect its employees and business partners. At all locations, this involves physical distancing, the use of personal protective equipment and protective barriers where possible, combined with increased cleaning frequency and other heightened hygiene measures.

Market Environment

Following the reduction in demand as a consequence of the global COVID-19 pandemic, the Brent Crude oil price dropped from 64 USD/bbl in January 2020 to 27 USD/bbl in April 2020. The recovery of the Brent Crude oil price to 50 USD/bbl by December 2020 was supported by the disciplined supply reduction implemented by the OPEC plus countries and, towards the end of the year, the anticipated end of the pandemic thanks to the first available vaccines. Overall, the annual average Brent Crude oil price of 42 USD/bbl was down 35% from the average of 64 USD/bbl in 2019.

The price of naphtha developed in a similar pattern, decreasing from 527 USD/t in January 2020 to 138 USD/t in April 2020. Since then, its price has partially recovered, reaching 433 USD/t in December 2020. In line with feedstock prices, polyethylene prices averaged 10% lower compared to 2019; polypropylene prices averaged 14% lower in 2020 than in 2019.

Borealis polyolefin sales volumes have shown resilience in a market environment impacted by COVID-19, increasing by 2% versus the same period in 2019. Sales volumes of both Borouge and Baystar increased by ~10% year on year. Overall, integrated polyolefin industry margins increased in 2020 versus the previous year. The olefin share of the integrated industry margin contracted during 2020, as the light feedstock advantage reduced in the low oil price environment of 2020. Consequently, the profit contribution delivered from the hydrocarbons business was lower than in 2019.

Demand for Borealis Fertilizers was not impacted by the COVID-19 crisis in 2020. However, operational issues at fertilizer production sites in France led to reduced product availability and consequently, to a decrease in fertilizer sales volumes of 2% versus 2019.

In the first five months of 2020, the fertilizer market benefited from a declining natural gas price environment. Industry margins were thus reasonable, even though the expected market price recovery failed to materialise. The price of natural gas subsequently rose, yet fertilizer sales prices failed to recover to the same degree. This led to a compression of the industry margin. The financial result of the Fertilizer business was negatively impacted by lower production volumes, a weaker market environment and the impairment of fertilizer assets in Belgium and the Netherlands. The profit contribution was lower in 2020 than in 2019.

Strategy and Purpose

The year 2020 commenced with the global roll-out of the new Group Strategy 2035. The commitment to achieving sustainable growth in the long term is reflected in its stated purpose: “Life demands progress – we are re-inventing for more sustainable living.” The strategy builds on core Borealis capabilities and traditional values such as Respect, Responsible, Exceed and Nimblicity™. At the same time, it channels Group efforts to act as leaders in the transformation to a circular economy, to create a more customer-centric organisation on a global scale and to capitalise on demand in growth markets by way of geographic expansion.

As the coronavirus pandemic unfolded during the first months of the year, Borealis quickly launched a resilience programme. Its focus is on reducing and/or postponing costs and investments where appropriate in order to safeguard the company’s solid financial position.

The overall aim has been to mitigate the potentially negative impacts of the pandemic in all areas of Group business and to ensure a solid operating cash flow to fund ongoing growth projects.

Global Growth and Acquisitions Continue

Despite disruptions to infrastructure and supply chains around the world resulting from the pandemic, Borealis successfully proceeded with its growth projects in Europe, North America and the Middle East.

In June, a propylene splitter – one of the largest single pieces of equipment ever shipped – arrived safely at the construction site of the new world-scale propane dehydrogenation (PDH) plant under construction at the existing Borealis production site in Kallo, Belgium. Having passed this milestone, the facility is on track to start up in 2023 with a propylene production capacity of 750,000 metric tons/year (t/y). The approximately EUR 1 billion to be invested in the project constitutes the largest single investment ever made by Borealis in Europe and is a clear sign of the company’s commitment to being the supplier of choice to its European customers.

As construction on the new Borstar® polyethylene (PE) unit in Texas, US, progresses, changes were made with regard to ownership of this joint venture. In April, Borealis acquired the 50% ownership share in Novealis Holdings LLC that had previously been held by NOVA Chemicals. Thus Baystar™ is now a 50/50 joint venture between Borealis and Total Petrochemicals & Refining USA, Inc. The new unit will expand the Borealis footprint by enabling the supply of locally-produced Borstar products to North American customers for the first time. The project also entails the construction of an ethane-based steam cracker in nearby Port Arthur, which will supply approximately 1 million t/y of competitively-priced ethylene. The facility’s ethylene monomer will be used for both the existing 400,000 t/y PE units and the new 625,000 t/y Borstar PE unit.

In August, Borealis announced it had taken a controlling stake in the South Korean compounder DYM Solution Co., Ltd., thereby extending its global presence in the wire and cable industry. This acquisition augments the existing Borealis portfolio with complementary products and technologies, enables Borealis to respond more rapidly to local demand and boosts capacity in order to secure a reliable supply of specialised compounds.

In Ruwais, UAE, construction on another major growth project is nearing completion: the “PP5” or fifth Borstar polypropylene (PP) plant located at the Borouge 3 complex. The Borouge 4 project is also progressing successfully through the FEED (Front-End Engineering and Design) phase.

A joint feasibility study commissioned by the Abu Dhabi National Oil Company (ADNOC), Adani, BASF and Borealis to evaluate the development of a major chemical complex in Mundra, India was brought to a successful close in November 2020. However, while the partners are convinced of the project’s potential, they have postponed further potential next steps due to economic uncertainties also related to the COVID-19 pandemic.

EverMinds™: Borealis Pursues Sustainable Growth in the Circular Economy

As a global provider of innovative plastic solutions, Borealis has taken the lead in transforming the industry. Plastics circularity will be achieved once this valuable resource is always reused and recycled, and never wasted, and once all applications and products are routinely designed with circularity in mind. Borealis’ dedication to Value Creation through Innovation and customer-centricity have accelerated the shift, making it possible to develop and launch a wide range of innovative material solutions in the circular economy sphere. Moreover, Borealis continues to invest in mechanical and chemical recycling and has deepened its commitment to collaborating with leading industry and social welfare organisations to bring about industry change.

An integral goal on the path to “closing the loop” on plastics circularity is to increase the volume of recycled plastics solutions to 350,000 t/y by 2025. This will enable the production of larger volumes of second-generation recycled products. Another focus area is to ensure that by 2025, 100% of consumer products made with Borealis polyolefins should be recyclable, reusable or made with renewable materials.

Another important step towards circularity was taken in early 2020 as Borealis began manufacturing PP based on renewable feedstock at its production facilities in Kallo and Beringen, Belgium. This was the first time that Borealis replaced fossil fuel-based feedstock in the large-scale commercial production of PP. In the meantime, the polyolefin production plants in Kallo and Beringen, but also in Porvoo, Finland, and Schwechat, Austria, have received the ISCC PLUS certification issued by the International Sustainability and Carbon Certification (ISCC) organisation. This certification is the global standard for recycled and bio-based materials. It enables mass balance production of renewable and chemically recycled feedstock.

In September, Borealis announced the launch of the Bornewables™ portfolio. These premium polyolefin products are manufactured with renewable feedstock derived entirely from waste and residue streams. The Bornewables boast the same material performance as virgin polyolefins, yet with a lower carbon footprint.

Borcycle™ is the proprietary state-of-the-art technology launched in 2019. It transforms plastic waste streams into value-adding, versatile recycled polyolefins and serves as the foundation for an increasing number of more sustainable products and applications in the rigid packaging segment. In September, Borealis and MENSHEN, a leading specialist in plastic closures, launched a series of new packaging closures for laundry and homecare applications based on Borcycle UG522MO, a PP compound containing 50% post-consumer-recycled content.

A pilot project announced in December is a prime example of the EverMinds approach in practice. Based on the principles of reduce, reuse and recycle, it literally closes the loop by replacing single-use drinking cups with innovative new ones featuring a double-closed loop system. At four different Borealis sites in Belgium, 1.5 million single-use cups could be replaced by reusable lightweight ones made from Borstar HMS. These durable foam cups are collected and washed for reuse before eventually being recycled.

Borealis continues to invest in its recycling technologies and facilities. One example of recycling innovation is the ReOil collaboration with OMV. The patented OMV ReOil technology is used to chemically recycle post-consumer plastics into raw materials, which are then used by Borealis to produce polyolefins. Leading European multinational Nestlé has now become the first Borealis customer to use the ISCC PLUS-compliant polyolefins in consumer goods packaging.

Energy and Climate: Striving for Improved Efficiency in own Operations

Borealis has set ambitious goals to counter climate change by using energy and resources more efficiently. Borealis intends to draw 50% of electricity used in production from renewable sources by 2030. It also seeks to achieve a 20% improvement in energy efficiency (using the year 2015 as a baseline) and aims for zero non-emergency flaring by 2030 as well.

In July, Borealis and partner Neste announced the signing of two long-term power purchase agreements (PPAs) to source renewable electricity from a Finnish wind farm operator. Switching to wind-generated power over the next decade will help Borealis increase the overall share of renewables in its Porvoo production facilities to 13%. In October, another 10-year PPA was signed with the sustainable energy supplier Eneco, in which Borealis will source renewable electricity from a new offshore wind farm for its Belgian operations starting in January 2021.

In December, Borealis and Bionerga announced the joint commissioning of a new waste-to-energy plant constructed and operated by Bionerga in Beringen, Belgium. The new facility allows Borealis to reduce the amount of natural gas used in operations by supplying steam and electricity recovered from the processing of non-recyclable waste collected from nearby communities.

Finally, in October, Borealis commissioned a new 80,000 m3 naphtha cavern in Porvoo. Having invested approximately EUR 25 million in its construction, Borealis can now draw on and store naphtha for its operations in a safer and more economical way. Because it has been designed to store renewable naphtha as well, Borealis can produce ISCC PLUS-certified renewable base chemicals as well as renewable PP and PE for its customers.

Value Creation through Innovation in 2020

With a net profit of EUR 872 million, Borealis achieved a strong financial result in more difficult market circumstances, only slightly below the net profit of EUR 906 million in 2018. The 2019 result was impacted by a weak polyolefins market in Asia, leading to a significantly lower Borouge contribution to the Borealis financial result. The satisfactory integrated polyolefins margins in Europe and a recovery of the fertilizer business have offset this negative impact to a large degree.

Return on capital employed (ROCE) after tax of 11% in 2019 was in line with the Company’s target of 11% through the cycle, but was 2 percentage points below the 2018 result. This decrease reflects the lower net profit combined with an increased average capital employed, the latter mainly impacted by the new accounting treatment of leasing contracts under International Financial Reporting Standard (IFRS) 16, as well as substantial capital investments in growth projects.

In 2019, Borealis’ net debt increased by EUR 241 million. This resulted in a gearing ratio of 24% at the end of 2019, compared to 20% at the end of 2018. This gearing level is below the target gearing of 40%–60%. Borealis benefits from a well-diversified financing portfolio and a balanced maturity profile, which was further developed in May with the placement of another Schuldschein (German Private Placement) with a final volume of EUR 140 million and USD 70 million. In October, an inaugural dual currency “Samurai” loan was placed, with a final volume of USD 175 million and JPY 5,000 million, which in total amounts to approximately EUR 200 million equivalent and a tenor of five years. In December, a US private placement was successfully closed, covering 10-, 12-, and 15-year tenors for USD 165 million as well as 10- and 15-year tenors for EUR 40 million.

Operational Development of the Group

The Borealis net profit of EUR 589 million is below the net profit of EUR 872 million in 2019, yet represents a solid financial result in the context of a market environment strongly impacted by the pandemic and a declining oil price, which has consequently reduced inventory value. The 2020 result was also affected by a weaker hydrocarbons business, resulting from limited benefit from feedstock flexibility and operational issues at Borealis crackers in Stenungsund and Porvoo. In 2020, the contribution from the Borealis Fertilizer business declined versus 2019 due to a weaker industry margin and operational issues. The contribution from Borouge remained on a similar level as in 2019, where lower polymer prices in Asia were offset by substantially higher sales volumes.

Return on capital employed (ROCE) after tax of 8% in 2020 was 3 percentage points lower than in the previous year. This weaker result was mainly driven by the lower net profit and the continued investment in growth projects. However, the 5-year average ROCE of 13% remains above the company’s target of 11% through the cycle.

In 2020, Borealis net debt increased by EUR 264 million. This resulted in a gearing ratio of 29% at the end of 2020, compared to 24% at the end of 2019. This gearing is reflecting a very healthy balance sheet. Borealis benefits from a well-diversified financing portfolio and a balanced maturity profile. The latter was further enhanced in July by way of a EUR 250 million loan from the European Investment Bank (EIB) to support applied R&D efforts in the area of plastics circularity. The loan affirms the company’s alignment with the larger goals of the European Green Deal and the EU Plastics Strategy.

Review of Results


Borealis sold 3.9 million tonnes of polyolefins in 2020, slightly more than the 3.8 million tonnes sold in 2019. Borealis Fertilizers sales reached 4.3 million tonnes in 2020, a decrease of 2% versus 2019. Melamine sales volumes were 147 thousand tonnes in 2020, which is a similar level compared to 2019.

Cost Development

The lower feedstock price environment saw a drop in 2020 production costs compared to 2019. Furthermore, the stringent cost reduction measures implemented in 2020 to weather the COVID-19 pandemic have resulted in a 3% reduction of fixed costs. Sales and distribution costs decreased correspondingly from EUR 717 million in 2019 to EUR 681 million in 2020; administration costs decreased by 11% to EUR 223 million. Because the Borealis commitment to Value Creation through Innovation remains unchanged, spending on research and development rose to EUR 150 million in 2020, an increase of EUR 5 million versus 2019. At the end of 2020, the number of full-time equivalent employees (FTE) was 6,920, an increase of 51 on the previous year.

Operating Profit

Operating profit amounted to EUR 356 million compared to EUR 605 million in 2019. The reduction is a combination of the effects of reduced olefin margins, the reduction of the light feedstock advantage previously enjoyed and operational issues at Borealis crackers in Stenungsund and Porvoo. The result was also negatively affected by the weaker fertilizer market environment and lower fertilizer sales volumes due to the reduced operability of the company’s own fertilizer assets.

Financial Income and Expenses

The decline in net financial expenses from EUR 36 million in 2019 to EUR 23 million in 2020 was mainly due to higher interest income from the member loan granted to the Baystar joint venture with Total. Interest income increased following the acquisition of NOVA Chemical’s 50% interest in Novealis Holdings LLC, additional member loan drawdowns and progress of the investment projects.


Income taxes amounted to EUR 119 million, an increase of EUR 37 million from tax charges of EUR 82 million in 2019. The higher overall tax charge in 2020 was mainly driven by impairments of deferred tax assets on losses carried forward in France and the Netherlands. Additionally, the 2019 tax charge was positively impacted by the agreement reached between the Finnish and Austrian tax authorities on two cases regarding the taxation of Borealis Finnish subsidiaries Borealis Technology Oy and Borealis Polymers Oy.

Net Profit and Distribution of Dividend

The net profit for the year amounted to EUR 589 million, compared to a net profit of EUR 872 million in 2019. During 2020, Borealis distributed a dividend of EUR 300 million to its shareholders for 2019.

Financial Position

Total Assets/Capital Employed

At year end, total assets and capital employed stood at EUR 10,600 million and EUR 8,343 million, respectively, compared to EUR 10,118 million and EUR 8,110 million at the end of 2019.

The solvency ratio was 59% at year end 2020, compared to 63% at year end 2019. The gearing ratio increased to 29% at the end of 2020, compared to 24% in 2019.

Cash Flows and Liquidity Reserves

Cash flow from operating activities was EUR 1,083 million, driven by solid operating profitability. Liquidity reserves, composed of undrawn, long-term committed credit facilities and cash balances, amounted to EUR 1,142 million at year end 2020, compared to EUR 1,191 million at year end 2019. Net interest-bearing debt increased to EUR 1,833 million at year end, up from EUR 1,569 million at the end of 2019. The table below shows the change in net interest-bearing debt.

*) 2019 amount has been restated due to reclassification.

Capital Expenditure

Investments in property, plant and equipment amounted to EUR 614 million in 2020, compared to EUR 376 million in 2019. A large portion of the total investment relates to the new, world-scale PDH plant in Kallo, Belgium, the upgrade and revamp of four cracker furnaces in Stenungsund, Sweden and the debottlenecking of a PP-plant in Kallo, Belgium. Health, Safety and Environment (HSE) capital expenditure amounted to EUR 37 million, compared to EUR 43 million in 2019. Depreciation, amortisation and impairment amounted to EUR 464 million, compared to EUR 427 million in 2019. The increase was partially driven by the impairment of tangible assets in the Fertilizer business in Belgium and the Netherlands.

Shareholders’ Equity

Shareholders’ equity at year end 2020 was EUR 6,417 million.

Risk Management

Borealis has a documented risk management process ensuring that all parts of the Group routinely identify and assess their risks and develop and implement appropriate mitigation actions. Risk management contributes to achieving the Company’s long-term strategies and short-term goals. Borealis believes that an effective risk culture makes it harder for an outlier, be it an event or an offender, to put the Company at risk.

The Company’s overall risk landscape is periodically consolidated, reported and reviewed. Borealis distinguishes between different risk categories as outlined below. While this list is not exhaustive, it does exemplify the Company’s risks.

Strategic and reputational risks are those that may severely impact the Borealis Group’s strategy or reputation. Often, strategic risks are related to unfavourable long-term developments, such as market or industry developments, technology, innovation, a change in the competitive environment or a threat to the reputation of the Group.

Operational and tactical risks usually refer to unfavourable and unexpected short-term or mid-term developments and include all risks that may have a direct impact on the Group’s daily business operations. All operational risks are assessed according to documented guidelines and procedures that are administered by the respective business functions. A pro-active risk prevention management approach has been implemented in the Operations function, covering risks in the areas of Production; Health, Safety and Environment (HSE); Product Stewardship; Plant Availability and Quality. The risk management approach also safeguards the Responsible Care® approach towards risks in Operations. The standard risk management process includes a common risk matrix and risk registers, built bottom-up from plant to portfolio level, enabling a common risk rating system for the whole of Operations.

HSE risks are assessed according to the procedures and framework described in the Borealis Risk-based Inspection Manual. The HSE Director is responsible for managing all HSE-related risks and reports the Borealis HSE risk landscape to the Executive Board periodically.

Project-related risks are assessed in the Borealis project approval process. The applicable key risks related to an individual project are assessed. These risks include financial, market, technical, legal, patent infringement, strategic, operational, country-related and political factors. The risk assessment also reflects the probability of project completion within the estimated time frame and forecasted resource requirements and the likelihood that key project objectives will be achieved. Project-related risks are managed by the project manager and reported to the Project Steering Committee.

Financial and market risks may refer to risks arising for instance from unexpected changes in market supply, demand, commodity prices, services or financing costs. Risks may also arise from liquidity, interest rates, foreign exchange rates, credit, commodity prices and insurance, the inability of a counterparty to meet a payment or delivery commitment and may for example extend to incorrect assumptions or the inappropriate application of a model. The assessment of financial risk management is described in detail in Note 18 of the consolidated financial statements. The Treasury & Funding Director and the General Counsel are responsible for reporting and coordinating the management of all financial risks.

Compliance risks focus on legal and regulatory risks, code of conduct (ethics policy), standards as well as contracting compliance. Doing business in an ethical manner is vital to Borealis’ good reputation and continued success. Tactical or generic risks are risks identified as part of standards or compliance. These risks mainly relate to processes or control weaknesses.

Information security risks relate to the confidentiality, integrity and availability of critical company information. The IT Director and the General Counsel support line managers with the assessment of information security risk and the development and implementation of risk mitigation actions.

The Executive Board periodically reviews the Group’s key risks, defines the Group’s risk tolerance levels, monitors the implementation of mitigation actions and reports the key risks and mitigation steps to the Supervisory Board. The Executive Board safeguards the integration of risk assessment in its strategic planning.

The Supervisory Board is responsible for reviewing the effectiveness of Borealis risk management practices and processes, risk appetite and tolerance levels, the Group’s risk exposure and the effectiveness of mitigation actions. The Supervisory Board delegates some of these responsibilities to the Audit Committee, which is a sub-committee of the Supervisory Board.

All Borealis employees are responsible for managing risk, within their authority and in their field of work, in order to ensure that risk management is properly embedded in the organisation and reflected in the daily decisionmaking processes.

Company Ownership

In 2019, Borealis extended its initial ambition under the Borealis Energy Roadmap 2020 to improve energy efficiency by 10% (equivalent to 2,400 GWh) in 2020 versus the reference year 2015. The enhanced target is to double the energy efficiency reduction by 2030, meaning an increase in energy efficiency by 20% by 2030.

Having implemented ISO 50001 in 2018, Borealis will use this international energy management Standard as the foundation for achieving its energy efficiency targets. Borealis will therefore implement tools to operate its plants in the most efficient way, continuously optimise plant design and monitoring, and implement new technologies to optimise energy efficiency. Furthermore, industrial clusters will be used to seek further energy integration.

Changes to the Supervisory Board

Effective 21 February 2020, Khalifa Abdulla Khamis Alromaithi was appointed Supervisory Board member, succeeding Khalifa Al Suwaidi. Effective 29 October 2020, Reinhard Florey and Saeed Al Mazrouei were appointed Supervisory Board members, succeeding Suhail Mohamed Faraj Al Mazrouei and Khalifa Abdulla Khamis Alromaithi. In addition, effective 29 October 2020, Rainer Seele was appointed Chairman and Musabbeh Al Kaabi Vice-Chairman of the Supervisory Board.

Borealis Pulse Check 2020

The Borealis People Survey is a very important instrument for enabling employee feedback. Among other things, it measures levels of employee engagement, and compares these to other companies in the chemical sector and beyond. The response rate to the 2019 survey, which was sent to employees in the fall of 2019, was 85%. This rate is excellent and a slight improvement over the previous survey cycle. The results will be reviewed in detail and translated into tangible “People Actions” in the first quarter of 2020.

Economic Development and Outlook

Outlook for 2021

In 2021, Borealis management will further increase company emphasis on safety – both occupational and process – in order to achieve the ultimate goal of zero incidents. Safety thus remains the number one priority for the Group: from top to bottom and across all global operations.

The rebuilding of the post-pandemic global economy will require innovative technologies and products that help make life safer and more sustainable. Thanks to the company’s leading-edge portfolio of advanced and circular polyolefin solutions, Borealis management is confident that it can capitalise on the opportunities for growth during economic recovery. It will maintain its commitment to re-inventing for more sustainable living and by offering chemical and plastic solutions that create value for society.

On 4 February 2021, Borealis announced that it has started a process to divest its nitrogen business unit including fertilizer, technical nitrogen and melamine products. The company’s share in fertilizer production sites in the Netherlands and Belgium (“Rosier”) is presently not being considered within the potential sales process. Such a divestment would be subject to information and consultation requirements with employee representatives as may be required under applicable laws.

1) Environmental data might be subject to minor adjustments due to ongoing audits and missing third-party data at the time of closing of this report. // 2) Severe upsets led to significant emergency flaring during shut-downs; further there was a lack of recycling capacity. // 3) Amounts from 2016-2019 have been restated due to reclassification.

Other Information

In accordance with section 267a (6) of the Austrian Commercial Code (UGB), Borealis prepares a separate consolidated non-financial report.

Combined Annual Report 2020 (PDF)

English and German Version available

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This online report contains only highlights and excerpts from Borealis’ Combined Annual Report 2020. Only the entire report is legally binding and it must be read in full to gain a comprehensive understanding of Borealis’ performance and activities in 2020. A copy of the Combined Annual Report 2020 can be downloaded here.