2030 Strategic Priorities
- Grow polyolefin specialty sales volumes
- Deliver on ongoing growth projects (Baystar, Kallo PDH 2, Borouge 4) and increase geographical diversification
- Establish a leading position in renewable and circular economy solutions
- Proactively address the European market challenges through efficiency measures
- Diversify the portfolio and integrate further downstream
OMV expects that the total demand for polyolefins (virgin and recycled) will continue to grow with a CAGR of 4.1% (2024–2030). Virgin polyolefins are expected to grow with a CAGR of 3.4%, and recycled products by 12.0%. While all regions are expected to grow, 75% of this growth stems from high-growth markets in Asia.
A significant differentiator in Europe are our specialty-grade polyolefins, which represent approximately 45% of the Group’s polyolefin volumes and achieve a realized margin that is on average double that of standard products over the cycle. OMV focuses on developing technology for polyolefin specialties, catalysts, and design for recyclability. Technologies and patented new products are initially developed in Europe and then licensed to JV partners in other regions. While the standard polyolefin business is influenced by imports from various global regions, the specialty grades are afforded greater protection due to their advanced technological integration and the Company’s close relationships with customers.
OMV aims to grow its sales of specialty products to more than 2 mn t, an increase of around 30% compared to 2023. This will take place primarily in the industries of Energy, Mobility, and Infrastructure, where market growth is expected. OMV has a strong pipeline of organic growth projects in North America, Europe, and the Middle East, which will increase its polyolefin capacity by 30% by 2030 compared to 2021.
Key Growth Initiatives Include:
- Baystar JV in Texas, USA: 1 mn t integrated ethane to polyethylene complex. The ethane cracker is running at high utilization rates and the new PE Borstar® plant is ramping up. The medium-term EBITDA contribution for the entire project, of which Borealis holds 50%, is anticipated to be USD 500–600 mn p.a.
- PDH plant in Kallo, Belgium: building of a 740 kt propane dehydrogenation (PDH) plant in Kallo, which is anticipated to start up in the first half of 2026. The medium-term EBITDA contribution is estimated at around EUR 200 mn p.a.
- Borouge 4 JV, UAE: building of an ethane-based steam cracker with a capacity of 1.5 mn t and polyolefin plants with a capacity of 1.4 mn t. This first quartile cracker and the latest-generation Borstar® and XLPE technology also aim to serve the electrification megatrend in Asia. The start-up of the first unit is scheduled by the end of 2025 with the subsequent units to gradually start-up in 2026. The revenue after full production ramp-up for the entire project, of which Borealis holds 36%, is estimated at USD 1.5–1.9 bn p.a.
A key pillar in the Chemicals business is growing the sales volumes of sustainable products. As part of its ambition to establish a leading position in renewable and circular economy solutions, OMV aims to grow its sales volumes of sustainable base chemicals and polyolefins to up to 1.4 mn t by 2030. 70% of these volumes will be derived from mechanical and chemical recycling. OMV’s flagship project in this area is ReOil®, its proprietary chemical recycling technology. The ReOil® plant with a capacity of 16,000 t has been completed and will ramp up in 2025. The aim is to scale it up to an industrial plant of 200,000 t by 2029, the first of this size globally. The remaining 30% of the sustainable sales volumes will be generated by biobased base chemicals and polyolefin volumes. Leveraging the integration with F&F and the future hydrotreated vegetable oil (HVO) plants will be essential in achieving this. OMV is also investing in feedstock projects that are expected to offer double-digit returns. For example, the Company is constructing the largest sorting facility in Europe as part of the JV with Interzero to ensure cost-competitive feedstock.
OMV aims to strengthen its polyolefins business by building on existing strengths and capabilities and fully exploiting competitive advantages to grow into adjacent markets, targeting investments and initiatives that improve returns and decrease the Group’s carbon footprint.
OMV considers options for portfolio diversification and expanding its downstream integration. The Company is exploring opportunities for geographical expansion in North America and Asia, where it sees significant growth potential. In July 2024, Borealis, in a consortium with Borouge and ADNOC, signed a collaboration agreement with the Wanhua Chemical Group, a leading Chinese chemical company, for a feasibility study to develop a 1.6 mn t p.a. state-of-the-art polyolefin complex in Fuzhou, China. The plan is for Borealis’ proprietary Borstar® technology to be at the core of the project, enabling the development of products that are well suited to driving the transition toward a circular economy for plastics. Increasing the volumes of specialty products, expanding our circular solutions, and considering entering adjacent markets are potential avenues for expansion.
While polyolefin demand is expected to grow by 2030, the market is under pressure, with global supply outpacing demand due to significant new capacities in China and the Middle East. The Group’s chemical assets are well positioned on the cost curve, with 75% positioned in the top two quartiles. This is supported by the Nordic crackers having high feedstock flexibility, capitalizing on the strategic proximity to the sea and ownership of storage caverns. The crackers in Austria and Germany benefit from the deep backward integration with the refineries, while Kallo benefits from an integrated propane to propylene site. Overall, the 84% average utilization rate of OMV assets surpassed the European average of 74% in 2024. To further strengthen its competitiveness in Europe, Chemicals launched an efficiency program focusing on volumes, pricing, and variable costs in 2022.
Total organic CAPEX in Chemicals will average EUR 1.1 bn p.a. in 2024–2030, which represents around 30% of the Group’s organic CAPEX. Out of this, around 60% will be allocated to sustainable projects. By 2030, the clean Operating Result of Chemicals is expected to increase to EUR 2.3–2.6 bn, while the cash flow from operations is anticipated to grow to more than EUR 3 bn.