Borregaard's Biofuture: How New Leadership is Driving the Shift to Sustainable Chemicals

The transition of Tom Erik Foss-Jacobsen to CEO of Borregaard ASA (BRG.OL) on August 1, 2025, marks a pivotal moment for the Norwegian specialty chemicals leader. As the company shifts its focus to bio-based solutions amid soaring demand for sustainable materials, Foss-Jacobsen's deep industry experience and track record of scaling high-value divisions position Borregaard to capitalize on a multi-trillion-dollar ESG-driven market. This is a buy for investors seeking exposure to the intersection of industrial innovation and environmental stewardship.

A Leader Forged in Biochemicals

Foss-Jacobsen's 25-year tenure at Borregaard, including over 21 years in leadership roles, has been defined by his hands-on expertise in scaling divisions that anchor the company's bio-based strategy. Since 2019, as Executive Vice President of BioSolutions, he has overseen the development of lignin-based biopolymers and vanillin, two products at the heart of Borregaard's pivot away from traditional chemicals. His prior decade-long leadership of the Specialty Cellulose division (now part of the BioMaterials segment) demonstrated his ability to grow high-margin, niche markets—experience now critical as BioSolutions evolves into a standalone engine of growth.

While specific revenue metrics for BioSolutions under Foss-Jacobsen are not disclosed, Borregaard's broader performance since its 2012 IPO offers a compelling backdrop. The company's net profit has grown at a CAGR of 15% over this period, driven by its specialization in bio-based products. Foss-Jacobsen's promotion to CEO signals the Board's confidence that his leadership can sustain—and amplify—this trajectory.

Strategic Vision Aligned with Shareholder Interests

Foss-Jacobsen's compensation package, which includes stock options tied to long-term performance, aligns his incentives with Borregaard's shareholders. This is a stark contrast to the previous CEO's tenure, which lacked such explicit equity incentives. The move underscores Borregaard's commitment to fostering leadership accountability in an era where ESG and innovation are non-negotiable.

The CEO-elect's strategic priorities are clear: doubling down on R&D to commercialize next-gen bio-based materials and leveraging Borregaard's $50 million annual R&D budget to expand its biorefinery capabilities. Recent projects, such as the development of lignin-based adhesives for the construction industry, exemplify the company's focus on high-margin, sustainable applications.

Riding the ESG Tsunami

The demand for sustainable chemicals is surging. The global bio-based materials market is projected to hit $500 billion by 2030, fueled by regulatory tailwinds like the EU's Sustainable Products Initiative and corporate net-zero pledges. Borregaard's BioSolutions division is already a leader in this space, supplying vanillin—a natural vanilla flavoring—for food and cosmetics—and lignin-based polymers for packaging and automotive applications.

Foss-Jacobsen's vision extends beyond product development. He aims to solidify Borregaard's position as a “one-stop biorefinery”, integrating production of chemicals, biofuels, and materials under a single platform. This vertical integration reduces costs and carbon footprints, creating a moat against competitors reliant on fossil-based inputs.

Why Buy BRG.OL Now?

Investors should act decisively here. Borregaard trades at a 12x EV/EBITDA multiple, a discount to peers like Braskem (BRKM5.SA) and Solvay (SOLB.BR), despite its superior exposure to high-growth bio-based segments. The stock's 52-week low of NOK 120 offers a margin of safety, while its 2025 EBITDA growth target of 15-20% suggests upward re-rating potential.

Foss-Jacobsen's leadership transition is not just a personnel change—it's a catalyst for Borregaard to emerge as the dominant player in bio-based chemicals. With its R&D pipeline, ESG-aligned strategy, and a CEO who has lived and breathed the company's biofuture for decades, BRG.OL is primed for multiyear outperformance.

Action Item: Buy BRG.OL on dips below NOK 150, with a 12-month price target of NOK 200. This is a core holding for ESG and industrial tech portfolios.

Investment thesis: Borregaard's leadership transition and focus on bio-based innovation position it to capitalize on secular demand for sustainable chemicals, offering both growth and ESG credibility.