OMV and IPIC plan to consolidate their chemistry activities into subsidiary Borealis
- OMV and IPIC intend to incorporate their respective 50% shares of AMI Agrolinz Melamine International into their joint subsidiary Borealis within the first half of 2007
- Changes in the AMI Supervisory Board as of January 1, 2007
- OMV continues to focus on core business
OMV, Central Europe's leading oil and gas group, continues to focus on its core business: Exploration & Production, Refineries & Marketing and Gas. In this context OMV, together with its core shareholder International Petroleum Investment Company (IPIC), is planning on incorporating AMI Agrolinz Melamine International GmbH (AMI), one of the leading international producers of melamine and plant nutrients, into Borealis. OMV and IPIC each hold 50% of AMI. The final decision will be made in the course of the first half of 2007.
Borealis, a leading provider of innovative, value creating plastics solutions, is headquartered in Vienna, Austria and is Europe's second largest producer of polyolefins. AMI's headquarters will remain in Linz (Upper Austria) and, as a holding company, Borealis will provide full support to the company's further international expansion.
Gerhard Roiss, OMV Deputy Chairman and Borealis Supervisory Board Chairman, commented: "The integration of AMI's expansion strategy into Borealis will be a good solution for Borealis and AMI, whose businesses complement each other. Thanks to Borealis' ownership structure – OMV owns 35% and IPIC owns 65% – AMI's future development will continue to be accompanied and formed by experienced strategic partners."
For OMV this has the advantage that its strategic focus on its core business will be further strengthened, while at the same time profiting, via its investment in Borealis, from the growing plastics market supplemented by the assets of AMI. Overall this measure constitutes the last step in AMI's strategic repositioning which started in May 2005 with IPIC's acquisition of 50% of the company.
The incorporation of IPIC and OMV 50% shares of AMI into Borealis represents a strong combination of AMI's and Borealis' fields of business and operating synergies. Both companies are well positioned in their respective markets in Europe and are in the process of strengthening their growing presence in the Middle East, benefiting from the region's close proximity to the rapidly growing markets in Asia. Borealis already holds a competitive position supported by the production of Borouge, its joint venture with ADNOC (Abu Dhabi National Oil Company), in Ruwais, Abu Dhabi, which produces 600,000 tonnes of Borstar® polyethylene per year. The planned extension of these operations in the next few years will add a further annual capacity of 1.3 million tonnes of polyolefins by 2010. The establishment of an 80,000 tonne per annum production facility for melamine also in Ruwais is currently being pursued by AMI and ADNOC.
In 2005, the AMI group had a workforce of around 1,000 employees and sales of EUR 470 million. Borealis' had sales of EUR 4.8 billion and a workforce of 4,500.
John Taylor, Borealis CEO commented: "The acquisition of AMI enables Borealis to further develop a 'second leg' to its integrated polyolefin business. It provides opportunities for cost reductions and sharing best practices."
Changes in AMI Supervisory Board
The AMI Supervisory Board will be newly appointed as of January 1, 2007: Gerhard Roiss, OMV Deputy Chairman and Borealis Supervisory Board Chairman, will take over the position of AMI Supervisory Board Chairman from OMV Chairman Wolfgang Ruttenstorfer. In addition, Mohamed Al-Azdi (IPIC representative in Borealis' Supervisory Board) and John Taylor, Chief Executive Officer of Borealis, will be appointed to the AMI Supervisory Board.
AMI remains an Austrian company with international expansion
For AMI, the new ownership structure will provide the advantage of being able to advance its international expansion together with one of the world's leading plastics solution providers. Its headquarters will remain in Linz – this location currently being substantially upgraded to Borealis' international research centre in close cooperation with the Province of Upper Austria. No changes are planned in the AMI company structure or to its highly experienced employees. As Borealis' and AMI's businesses complement one another, these plans constitute an advantage for AMI in its entirety and for its employees.