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Statement of the Supervisory Board

Company Ownership and Changes to the Supervisory Board

The year 2021 has been a transformative one under the new ownership structure established in 2020, in which OMV became the majority owner by increasing its stake in Borealis to 75%. Stepped up collaboration under the motto “#strongertogether” has enabled Borealis and OMV to achieve meaningful synergistic effects, particularly in the area of plastics circularity.

In April 2021, Alfred Stern was appointed OMV Executive Board Member for Chemicals & Materials, replacing Thomas Gangl, who became Borealis CEO. Alfred Stern was also appointed to the Borealis Supervisory Board effective April 2021. He assumed the position of OMV CEO as of 1 September 2021 and followed Rainer Seele as Chairman of the Borealis Supervisory Board.

The Borealis Executive Board position previously held by Martijn van Koten, who was appointed to the OMV Executive Board as of July 2021, was filled by Wolfram Krenn, whom the Borealis Supervisory Board appointed as Executive Vice President Base Chemicals & Operations and member of the Borealis Executive Board as of July 2021. Effective as of September, Martijn van Koten joined the Borealis Supervisory Board.

As of 10 February 2022 Alvin Teh was appointed as Supervisory Board member, succeeding Musabbeh Al Kaabi. In addition, Saeed Al Mazrouei was appointed as Vice Chairman of the Supervisory Board.

The Supervisory Board would like to thank the former board members and Rainer Seele in particular, who, as Chairman of the Supervisory Board, played an instrumental role in ensuring the future success of Borealis as a leading global provider of innovative and circular polyolefins-based solutions in a rapidly changing industry environment.


Borealis reported a Total Recordable Injury Rate (TRIR) per million working hours of 2.3 in 2021. This is an improvement of 1.6 compared to the 3.9 reported in 2020. Although the TRI rate of 2.3 is world-class in the industry, Borealis must intensify its efforts to eliminate accidents and incidents altogether. The Supervisory Board is optimistic that by honing in its
focus on safety among both employees and contractors, Borealis will realise its highest priority, “Goal Zero”.

As the world enters the third year of the pandemic, the Supervisory Board would like to praise Borealis and its employees for their resilience and vigilance in the face of COVID-19. Adhering to stringent measures first introduced in 2020 to protect employees and contractors has required discipline and patience, yet these efforts have paid off. Many of these measures are likely here to stay as the coronavirus becomes endemic. The Supervisory Board is confident that with respect to COVID, the Borealis dedication to safety first will prevail.

Financial Results

With a record net profit of EUR 1.40 billion in 2021, Borealis has achieved outstanding results in an industry environment still affected by the pandemic. As the first signs of economic recovery became visible at the start of 2021, demand for Borealis polyolefins, primarily in the energy, healthcare and automotive sectors, rose rapidly.

In 2021, Borealis Polyolefins sales volumes reached a new peak of 3.95 million tonnes, an increase exceeding the pre-COVID sales volumes of 3.80 million tonnes achieved in 2019. Overall, 2021 Polyolefins sales volumes increased by 2% versus the same period in 2020 and 4% versus pre-COVID 2019. The polyolefin share of the integrated polyolefin industry margin reached previously unseen levels due to an increase in demand which was, additionally, accompanied by ongoing supply constraints due to logistics problems and industry production outages. The olefin industry margin expanded during 2021, albeit not as much as the polyolefin industry margin, as the market tightened on the back of stronger downstream demand in tandem with industry production outages.

Consequently, the hydrocarbons business delivered a profit contribution significantly above 2020 levels, but below those reached in 2019 as the advantage from cracking light feedstock became less favourable. The contribution from Borouge more than doubled from 2020 to 2021, driven by the favourable market development, and despite lower sales volumes due to logistics constraints, especially around mid-year.

Fertilizers sales volumes dropped to 3.91 million tonnes in 2021. This decrease is attributed to the temporary spike in sales at the end of 2020 which reduced demand in the following year, but also to production issues, especially at locations in France. Yet there was improvement in the contribution from the nitrogen business unit, from EUR 7 million in 2020 to EUR 78 million in 2021. This was supported by a favourable market environment, particularly in the Melamine business, and despite the spike in the price of natural gas.

In February, Borealis announced the start of a divestment process for its nitrogen business unit, including fertilizers, technical nitrogen and melamine products. The assets within the scope of the divestment project have been classified as assets held for sale and have benefitted from stopped depreciation. This was partially offset by an impairment charge in relation to assets in Rosier, which is not within the scope of the divestment project. Additionally, an impairment charge of EUR 444 million in relation to the assets within the scope of the divestment of the nitrogen business was recognised in 2021.

Supervisory Board

Corporate Strategy and Purpose

As a transformative year, 2021 has been marked by endeavours central to the three principle goals outlined in the Borealis Group Strategy 2035. First is geographical expansion in the form of acquisitions and partnerships, primarily in North America and the Middle East and Africa (MEA). These shall establish Borealis as the global partner of choice for advanced polyolefins solutions. A second aim is to leverage Value Creation through Innovation to develop customer-centric and more circular polyolefins solutions. The third involves leading from the core, building on the unique values and mindset of the Company to ensure that striving for excellence characterises all Borealis activities and efforts. The stated purpose imbued in the Group Strategy 2035, “Life demands progress – and we are re-inventing for more sustainable living”, has proven its special relevance during times of crisis. Borealis is ideally positioned to provide innovative material solutions to its customers around the globe to address society’s most pressing challenges, be it decarbonisation, energy, transportation or healthcare.

Global Growth Projects

In 2021, Borealis continued to make significant progress on its important global growth projects. In November, Borealis and ADNOC signed an historic USD 6.2 billion final investment agreement to build the fourth facility at the Borouge polyolefins manufacturing complex in Ruwais, UAE. After start-up, Borouge will be the world’s largest single site polyolefin complex, with an annual polyethylene production capacity of 6.4 million tonnes. Borouge thus ensures the reliable supply of differentiated polyolefins solutions in energy, infrastructure and advanced packaging to its customers in the MEA and Asia.

In North America, construction on the Baystar™ project in Texas (a 50/50 joint venture between Borealis and TOTAL Petrochemicals & Refining USA, Inc.) is progressing, albeit with delays resulting in part from the unusually severe winter freeze in February. In Kallo, Belgium, the new world-scale propane dehydrogenation (PDH) plant being built adjacent to the existing PDH facility is progressing well despite minor delays due to pandemic-related issues. The project investment of around EUR 1 billion makes it the largest ever for Borealis on the continent.

Two important acquisitions carried out in 2021 are certain to speed up the transition to a circular economy of plastics. Borealis acquired a 10% minority stake in Renasci N.V., a Belgium-based provider of innovative recycling solutions, and a minority stake in Bockatech, a UK-based sustainable packaging innovator.

Plastics Circularity

Borealis is rapidly becoming a leading global provider not only of advanced polyolefins solutions, but of circular ones as well. The Company’s dedication to bringing about a circular economy of plastics is embedded in its corporate strategy and embodied by its EverMinds™ approach. It is supported by significant investments in its assets, as well as in R&D and proprietary technologies. And it is becoming more and more visible in the innovative products and applications it brings to market in collaboration with its value chain partners and customers. Borealis is taking great strides towards realising two important goals on the path to closing the loop on circularity: to ensure that by 2025, 100% of its consumer products are either recyclable, reusable or made using materials from renewable sources; and to increase the volume of recycled plastics solutions to 350,000 tonnes/year by 2025.

In mechanical recycling, Borealis and its strategic partner TOMRA inaugurated a state-of-the-art demo plant in Lahnstein, Germany. This partnership is helping guarantee the abundant availability of high-quality recyclate for sophisticated applications. The aforementioned acquisition of a stake in Renasci N.V. and the offtake agreement for circular pyrolysis oil are intensifying efforts in the area of chemical recycling. These complement the existing ReOil® co-operation in which the patented OMV technology of the same name is used to chemically recycle post-consumer plastics into raw materials which are subsequently processed by Borealis into polyolefins and circular base chemicals. A test of renewably-sourced feedstocks is also being carried out at a Borealis cracker in Stenungsund, Sweden, to evaluate the viability of feedstock derived 100% from vegetable-based waste streams as a replacement for fossil fuel-based feedstocks.

Value Creation through Innovation 2021

In terms of product innovation, it was a successful year for both circularity and value chain collaboration. Borealis and TOPAS Advanced Polymers are currently developing a new class of engineering material for film capacitor applications which has the makings of a step-change innovation for the power industry value chain. Borealis and Sulzer, a global leader in fluid engineering, announced the successful development of an innovative process for the cost-effective extrusion of expanded polypropylene beads. This breakthrough should encourage the broader and more rapid uptake of a highly effective material which boasts advanced properties and good suitability for reuse and recycling. Borealis and Uponor Infra, a pipe and fittings maker, have developed a new generation of PP sewer pipes made using a product from the Bornewables™ portfolio and boasting a significantly lower carbon footprint.

A very visible product of collaboration between Bockatech and Borealis passed through the hands of attendees at the COP26 in Glasgow, Scotland: lightweight drinking cups which can be collected and washed for reuse before being recycled. Other results of customer-centric collaboration in more sustainable food packaging formats include ready-to-drink cups made incorporating chemically recycled PP, and food cup prototypes featuring in-mould labelling made of Bornewables PP.

Energy and climate: Push Towards Decarbonisation

On its journey to decarbonisation, Borealis is reducing the environmental impact of plastics production by making significant changes in the way it operates. Borealis aims to ensure that by 2030, renewable energy makes up 50% of the electricity supply for the company’s production operations in Europe. To this end, several power purchase agreements (PPAs) with renewable energy providers were signed in 2021, including a nine-year PPA with Swiss renewables producer and trader Axpo, and a ten-year PPA with the Finnish energy company Fortum. The latter is the fourth and largest to date for the Company. The first of several planned photovoltaic arrays produced using the proprietary Quentys™ technology and used to power portions of Borealis production operations is now being installed in Monza, Italy.

Another important goal for European operations is to increase energy efficiency by an additional 10% by 2030 (from a 2020 baseline). The 10% efficiency improvements already achieved in the years 2015–2020 were obtained primarily by upgrading and modernising production facilities. In February, Borealis announced a EUR 17.6 million investment in a regenerative thermal oxidiser for its polyolefins plants in Porvoo, Finland. And at the massive Borouge 4 complex, ultramodern technologies will be used to improve energy efficiency and lower emissions; continuous flaring will be completely eliminated.

Economic development and outlook for 2022

As ever, safety comes first: the Supervisory Board reiterates that the paramount goal for the entire Group is to reach “Goal Zero”. We are confident that the measures implemented by Borealis management to this end will produce the desired results in occupational and process safety.

While the market environment for the integrated polyolefins business is not expected to maintain the extraordinary levels seen in 2021, we expect margins to remain at a healthy level in 2022 thanks to strong demand and ongoing logistics constraints. The profit contribution from Borouge to Borealis is predicted to remain at a comparable level as in 2021.

In the course of becoming stronger together, Borealis and OMV will continue to leverage their respective areas of strength and expertise in order to capitalise on opportunities for collaboration and growth. The ongoing constructive exchange between Boards, management and staff will accelerate this positive development.

Vienna, 21 February 2022
Supervisory Board

Combined Annual Report 2021 (PDF)

English and German Version available

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This online report contains only highlights and excerpts from Borealis’ Combined Annual Report 2021. 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 2021. A copy of the Combined Annual Report 2021 can be downloaded here.