Borealis evaluates possible closure of HDPE plant in Norway

In an extraordinary Board meeting in Borealis AS today, it was decided to inform the Borealis AS Supervisory Board in an extraordinary meeting February 13 about the ongoing evaluation of the future of the Borealis high density polyethylene (HDPE) plant in Bamble, Norway. A potential closure of the plant in 2006 is one of the options being considered.

Borealis is continuously aiming to strengthen and improve the competitiveness of its European operations. In today's polyolefins business, HDPE is one of the toughest markets to be in.

Despite our efforts to improve the situation, the Norwegian plant is the least competitive of the HDPE plants in the Borealis Group incurring losses over the last few years. The future industry outlook is challenging, particularly in view of significant capacity increases in the Middle East, which will come on stream in the next few years. We will continue to look for future cost competitive feedstock in Norway.

The HDPE plant in Norway is one of three production units in Bamble, 160 kilometers southwest of Oslo. The plant started up in 1979 with a capacity of 50,000 tonnes per year and after several debottleneckings, the capacity is today 110,000 tonnes per year. The main products are in the areas of blow moulding and rotomoulding e.g. materials for bottles and leisure boats.

Borealis in Norway has 500 employees of which about 300 are linked to the operation of the production units. The innovation centre and various support and Group functions total about 200. A possible closure of the plant will affect about 100 employees in Norway.

A consultation process with employees and their organisations will now be initiated. Once the evaluations and consultations are complete, the Board will present a final recommendation to the Borealis AS Supervisory Board for decision in an extraordinary meeting planned March 13, 2006.

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