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Innovation Strategy: An Enabler of Sustainable Profitable

Growth in the Polymer Industry

Dr. Thorsten Loehl, VP Innovation, Borouge Pte Ltd., Abu Dhabi

18 September 2017

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Borouge: a groundbreaking Joint Venture

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▪ Leading provider of innovative, value

creating polyolefin plastics solutions

▪ Based on proprietary Borstar®

technology

▪ Focus on energy infrastructure,

advanced packaging and mobility

markets for the Middle East & Africa,

Asia-Pacific and Indian sub-continent

markets

▪ 4.5 million tons of PO capacity

▪More than 3,000 employees globally

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Business Model determines Innovation ApproachBorouge: Value creation through people and innovation

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‘Commodity’ path

Feedstock Olefins Polyolefins Converters End users Consumers

‘Value Creation’ path

Feedstock Olefins Polyolefins Converters End users ConsumersRe-useRecycleRecover

• Focus on costs

• Process efficiency

• Quality

Implications for Innovation

• Understand full value chain

• Have solutions, not products

• Have an innovation oriented

organization

High switching barrier

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Borouge Focus Markets…

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PackagingMobility

InfrastructureEnergy

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… and respective selected Innovation Needs & Drivers

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PackagingMobility

InfrastructureEnergy

• Cable durability & lifetime

• Ultra high voltage cables

• Solar energy: module TCO

• Lower sagging

• Less material w. same pressure resistance

• Abrasion resistance

• Termite resistance

• Chlorine resistance

• Reduced weight

• Scratch resistance

• Heat resistance

• Paintability

• Recyclability

• Production throughput

• Reduced material/down gauging

• Functional (barrier, convenience)

• Recyclability

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Cross Functional Project Team

Innovation Council

Product Portfolio Management Meeting

Borouge Innovation ProcessMarket Pull as predominant approach

Idea

Phase

Opportunity

Assessment

Concept

Development

Detailed

Development

Launch

Implementation

Project

Close

Innovation GovernanceInnovation Process

Executes

Recommends

Decides

Sales Marketing Innovation Technical Operations Finance

Opportunity R&D Commercialization

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900850750

320

700550

1,000

20162014 20212020201920182017

Innovation Portfolio Managementlagging & projecting KPIs

Project Selection Portfolio tracking and prioritization

Business

Case

Strategic Fit

& Vision

Resource

Availability

Innovation Value

New Product Sales

+200

New

Product

1.200

Reference

Product

1.000

Volume Innovation

Value

Innovation

Margin* =

Mill $Illustrative

7

kt

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Poll: Reduction of food wastage

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In less developed countries, what do you think is the % food wasted from harvest to home :

10%

20%

30%

50%

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50% WASTE

HARVEST TO HOME

3% WASTAGE OF

FOOD CHAIN

Preservation

In the less developed

world up to 50% of all food

is wasted between harvest

and home (food chain).

In a ‘packaging-oriented’

society wastage is

reduced to around 3%

Waste

HealthFood

Climate

Reduction of food wastage

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Source: Plastics Europe

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Selected Challenges in Packagingand possible innovative solutions

Selected key challenges to Innovation

➢ Packaging Integrity while down gauging

➢Good mechanical performance

➢ Processability / High output

➢ Sealibility

➢ Better holding and tear strengths

➢ Excellent optical performance

➢ Excellent ESCR

RD265CF

✓Excellent Al adhesion

✓Excellent mechanicals

✓Good haze and gloss

FB1350

✓>20% Downgauging

✓Improved holding force

✓No hole burning

FB2230

✓20% Less material

✓Excellent processability

✓Good tear strength

HC402BF

✓The high speed grade

✓Excellent mechanicals

✓Good Metallizability

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Cost efficiency &competitiveness

▪ 20-40% Higher productivity

▪ Superior product performance

▪ Better color MB dispersion

Product Safety

▪ Long life with excellent impact

▪ As safe as RA130E

▪ Ahead of the needed standards

Lower carbon footprint

▪ Light weight

▪ Energy savings

▪ Lower scrap

Example: Improved hot and cold Water ApplicationsBorstar® RA 140E

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Example: A high performing PE100 Borsafe HE3490-LS-H

▪ SCG: Slow Crack Growth Resistance

▪ RCP: Rapid Crack Propagation Resistance

▪ MRS: Minimum Required Strength - 50 Years

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Proactive developments, addressing the global and industry

challenges with unique product technologies

From market follower to market driver

Preferred development partner

Value creation … together

‘Value Creation’ path

Feedstock Olefins Polyolefins Converters End users Consumers

Working with the Value ChainCreating value together

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Collaboration is Key to SuccessExamples: recent GPCA excellence awards winners

‘The Full PE Laminate’ is a BorShapeTM /

Borstar® bimodal PE based MDO / blown

lamination structure

▪ 100% recyclability

RG568MO – absolute clarity, made possible

by the groundbreaking new Borstar Random

Technology

▪ Excellent aesthetic performance

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Moving forward: Innovation Strategy 2030 a business strategy enabler

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Innovation Strategy elements :

▪ Strengthen key application knowledge

▪ Collaborate across whole value chain

▪ Focus on key innovation drivers

▪ Differentiate at scale

Business Strategy elements :

▪ Strengthen and maintain market position focusing on

differentiated products at scale and thereby double our

capacity to 10 million t/y leveraging our market growth by

2030

▪ Be recognized for innovative plastics solutions, focused on

high-end products with leading position across key

segments

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Value Creation through InnovationBorouge Innovation Centre

▪ State-of-the-art Innovation Centre in Abu Dhabi

▪ Expanded Application Centre in Shanghai

▪ Embedded in network with European innovation centres

▪ Open to partnership collaboration in technology, product & service across the entire value chain

▪ Profitable now and in the future

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Key Take Home Messages

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Match Innovation

to Business Model

Customer Intimacy

Robust Innovation

Model

Innovation is

profitable

Different business models command different innovation

approaches

Collaboration on eyes’ level with your customer across

value chain is key to innovation success in polymer

industry

Embed your innovation process in your business and

make it your CEO’s agenda to win

Innovation shall be a profitable investment, not a cost

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Thank you!

Agile

Innovative

Efficient

Collaborative

Value-driven

Reliable