LyondellBasell Launches Sustainable Strategy

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LyondellBasell is unveiling its long-term strategy at the New York Stock Exchange during its Capital Markets Day event. The strategy is aligned with the company's purpose of providing sustainable living solutions for everyday use.

LyondellBasell plans to drive growth, enhance margins, and boost returns by leveraging its technology leadership and sustainable solutions while focusing on advantageous global markets.

The company wants to be the first choice of investors, customers, and brand owners who care about environmental, social, and governance (ESG) issues by changing its business model to use plastic waste as a valuable source of carbon and by creating circular and renewable materials to meet the growing demand for sustainable solutions.

LyondellBasell's new strategy centres around sustainable value growth and includes three main components:

  • Expanding and upgrading its core business by focusing on growth opportunities in expanding and well-positioned markets.

  • Establishing a profitable Circular & Low Carbon Solutions (CLCS) business to generate at least $1 billion in incremental EBITDA by 2030, utilising the company's existing strengths of scale, market access, and technology leadership.

  • Improving performance and culture by shifting from cost control to a more holistic view of value creation and customer centricity.

LyondellBasell's strategy is backed by a value enhancement programme (VEP) that aims to achieve a recurring annual EBITDA improvement of at least $750 million by the end of 2025. The VEP will enhance value by expanding capacity through low-cost debottlenecks and improved reliability, reducing costs and emissions by saving energy, and increasing margins by improving procurement, logistics, and customer service.

"Our products are an essential part of a safe, healthy and more sustainable living, and I am confident our new strategy will unlock the true potential of our company," said Peter Vanacker, LyondellBasell CEO. "Our strategy is differentiated by our ability to effectively execute these three impactful elements all at once, driven by our passionate people and enabled by our technology leadership, our exceptional cash generation and our strong balance sheet. We believe our core businesses have lasting advantages, and we will grow our advantage through highly focused and disciplined reinvestment. This will deliver strong profitable growth and deliver compelling returns to our shareholders."

Although the new strategy was unveiled recently, LyondellBasell initiated its execution in 2022. The company made strategic moves such as divesting its Australian polypropylene business and exiting the refining business. LyondellBasell also formed the Customer and Commercial Excellence team to enhance customer focus, established the CLCS leadership role and business, implemented and expanded its VEP, and took major steps towards reducing greenhouse gas emissions.

LyondellBasell plans to evaluate future investments in its Houston Refinery site to retrofit it for the CLCS business, aligning with its strategy to leverage existing assets.

The company has also announced plans to explore strategic options for its U.S. Gulf Coast-based ethylene oxide & derivatives business to focus on its core businesses.

The new strategy aims to increase earnings, unlock value, and establish LyondellBasell as a profitable leader in the circular and low-carbon solutions markets while providing strong returns for investors.

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Source: LyondellBasell

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