Agility Global & Borouge to Set Up Polyolefins Logistics Hub and Manufacturing Unit in Shanghai

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Researched by Industrial Info Resources (Sugar Land, Texas)--Borouge (Abu Dhabi, United Arab Emirates), a leading manufacturer of plastics, and Agility Global Integrated Logistics (KUW:AGLTY) (Kuwait City, Kuwait), a leading global logistics provider, are setting up a logistics hub in Shanghai to receive over 600,000 tons per year of polyolefins, consisting of polyethylene and polypropylene in bulk containers from the Borouge Middle East gateway in Ruwais, United Arab Emirates. The facility is being developed over a land area of 70,000 square meters. Construction of the hub is scheduled to be completed by 2009. The facility is slated to be fully operational by May 2010, employing about 120 personnel from Agility's workforce.

Agility is also setting up a compound manufacturing unit for Borouge at the same site in Shanghai. Spread over a land area of 30,000 square meters, the facility will have a production capacity of 50,000 tons per year of compounds manufactured from enhanced Borstar polypropylene and will cater to the Shanghai market. These compounds will be used in automotive, domestic appliance, electrical and power-tool applications.

In August 2008, Borouge awarded a $220 million service contract to Agility to set up the Shanghai Logistics Hub and the Borouge compounds manufacturing unit in Shanghai and to provide local logistics services for Borouge's customers in Asia for a period of 10 years, starting in 2010. The proposed facility is being set up by the firm in a bid to move closer to customers in Asia. Under the contract, Agility was entrusted with the responsibility of design, development and subsequent operations of the facility to provide adequate packaging and distribution services and storage facilities for Borouge's products dispatched from Abu Dhabi. On November 28, 2008, the two firms broke ground for the Shanghai Logistics Hub.

Borouge is a joint venture entity set up by state-owned Abu Dhabi National Oil Company (Abu Dhabi), one of the largest oil and gas companies in the world, and Borealis A/S (Vienna, Austria), a leading provider of plastics solutions. Borouge's petrochemical complex in Ruwais has a current production capacity of 600,000 tons per year of Borstar polyethylene, which will go up to 2 million tons per year upon completion of the ongoing Borouge 2 expansion project. The firm will also add polypropylene to its product portfolio as part of the expansion. The upcoming Borouge 2 facility is being equipped with a 1.5 million-ton-per-year ethylene cracker unit, the world's largest olefins conversion unit with a capacity of 750,000 tons per year, two plants to produce Borstar polypropylene with a total production capacity of 800,000 tons per year, and a Borstar polyethylene plant with a total production capacity of 540,000 tons per year.

Agility Global Integrated Logistics, formerly known as Public Warehousing Company Logistics, started as a Middle Eastern company and is currently a $6.3 billion enterprise with over 32,000 personnel employed in 550 offices across 100 countries. The company recently won the prestigious Supply Chain Innovation Award at the Supply Chain Asia Awards function held in Shanghai. The firm's global growth was mainly propelled by acquisitions of leading international logistics providers such as GeoLogistics, TransLink Holding AB (Kilafors, Sweden), and Transoceanic. Agility hopes to expand into Qatar, Eastern Europe, Iraq and parts of Asia.

At the beginning of 2008, the size of the global logistics market was pegged at $2 trillion. Global freight is expected to reach $14 trillion by 2020, and the Gulf region is slated to emerge as one of the world's leading logistics hubs owing to its strategic location between Asia and Europe. The logistics industry in the United Arab Emirates is estimated to reach $40 billion by 2010 at a growth rate of 17% to 19%, outpacing the region's industrial growth rate, which is pegged at 9%.

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