Lead by innovation

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Harald Hammer, CEO of Borouge Pte.

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Borouge supplies the automotive, piping, packaging and cabling industries with a broad range of products.

Harald Hammer, CEO of Borouge Pte, talks about the importance of innovation in capitalising on the region's strong position in the petrochemical industry.

Harald Hammer thinks that what his company is doing makes good sense. As head of Borouge Pte, the Singapore based marketing arm of Bourouge - a 60/40 joint venture between the Abu Dhabi National Oil Company (ADNOC) and European plastics company Borealis - he is in an excellent position to tell.

Referring to the automotive industry as a 'story for the future', Hammer summed up this good sense when he described how the company is looking to make the most of its position by combining technology with access to feedstock.

"Our shareholder Borealis is a leading player in Europe, with its own technology, Borstar," said Hammer.

"It is in a good position in the European automotive market. What we're doing is transferring knowledge from Europe and focusing more or less on the Chinese automotive industry."

"The technology, combined with our feedstock, will give us a competitive advantage. We think that utilising the feedstock base to produce resins in Abu Dhabi, with knowledge from Borealis, to sell it in Shanghai, makes very good sense."

The dilapidated state of the US dollar is one influencing factor, but there's more to it than that. Borouge is staking its future on innovation. It searches for new applications for its product, not necessarily big-bang discoveries, but small things that make products better, lighter or stronger. As such, innovation lies at the heart of the company's strategy.

"We combine the feedstock from the Middle East, available on an economic basis, with European marketing and sales expertise, to build up our value creation through innovation," said Hammer.

"We are going into applications where our cost advantages and especially our technology advantages come through. They don't come through in a carrier bag, where there is no innovation."

Bourouge's ideas of innovation include car panels made from polypropylene.

Better elasticity than metal means the panels are safer for pedestrians. They are also more cost effective for manufacturers.

A protective greenhouse film helps tomatoes grow quicker, according to Hammer, who also references another milky film; use it for courier bags and its matt finish means you can write on it with a regular ballpoint pen.

"These small things can drive innovation in a very efficient way," he said.

While the automotive industry is one that's on the road ahead for the company, it has already driven innovative applications into three established sectors.

There's infrastructure in the form of pipe systems. The Borstar product means the pipes can be thinner than those made from alternative materials, but withstand the same pressures.

Hammer describes this as a growing sector, thanks to the potential for the substitution of existing materials, such as PVC or copper. Borouge is also working in the advanced packaging market and already has a substantial market share of the cabling industry's insulation and jacketing needs.

"So our business model is simple," said Hammer. "Our owners and shareholders can serve us. On the one hand there is the feedstock side, which for sure is competitive. Then you have the marketing and sales side and a strategy that is focusing on applications. You get a certain price premium over commodity products if you do this in a good way, while maybe slightly increases your costs, but at the end of the day the sales margin is better than that of the competition."

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