Hungarian oil and gas company MOL Group has revealed plans to invest $1.9bn until 2021 to develop its petrochemicals business.
For the next five years, the company will focus on improving yield of propylene and investment into attractive propylene derivatives.
MOL Group chairman-CEO said: “Following the announcement of our long-term strategy, ‘MOL Group 2030 – Enter Tomorrow’, we are pleased to host today the capital markets day to give the financial community a comprehensive update about our financial targets and the implementation of our strategy in the next five years.
“Relying on our integrated business model’s strong cash-flow generation and our robust balance sheet, we will invest substantial funds into strategic investments to further diversify our business and increase our exposure in areas that are not dependent on the demand for motor-fuels.
“As a result of our industrial transformation, the first phase strategic projects in petrochemicals are expected to contribute $250m-$300m annually to our EBITDA, while the weight of customer services is expected to exceed 20% of our total EBITDA by 2021.
“At the same time, our strong cash-flows will also be able to comfortably maintain the rising trend in dividends for our shareholders.”
For further diversification in the propylene value chain, the company will invest more than $500m into its steam crackers in Hungary and Slovakia.
MOL is also planning to invest in propylene oxide based polyols, a high-value product applied in the automotive industry, packaging and furniture manufacturing.
The company is seeking to become the sole fully integrated supplier in CEE, the region, which is driving the European supply growth. Additional investments are being planned for another possible product entry.
MOL also has plans to enhance the feedstock for its petrochemical plants, as well as take the advantage of the growing demand for such profitable products as jet fuel, lubricants and base oils.