Bayer AG has unveiled a seven-year plan to invest $3.1 billion in its Chinese plastics and chemicals operations.
Leverkeusen, Germany-based Bayer already has broken ground on a 440 million-pound-capacity polycarbonate plant in Shanghai, China. The $450 million unit is to begin production by mid-2006.
``The People's Republic of China is one of the most interesting and promising markets worldwide and therefore has highest priority in our strategic development plans,'' Bayer Chairman Werner Wenning said in a Nov. 26 news release.
Bayer also is building a 24 million-pound plant in Shanghai for polyisocyanate-type polyurethane. Plans to build plants making PU feedstocks methylene diisocyanate diphenyl and toluene diisocyanate are in place as well. A 510 million-pound-capacity MDI plant should begin production in 2008, while a 350 million-pound TDI plant is expected to launch in 2009.
Bayer has been selling its products in China since 1882. China now represents Bayer's second-largest Asian market, with 2002 sales of about $1.3 billion. Bayer employs 2,600 in China. The firm has not determined how many new jobs will be created by the development work, a spokesman said.
Of the $3.1 billion investment, projects totaling $1.8 billion already are under way. An additional $800 million will be invested between now and 2010. The remaining $500 million is earmarked for NewCo, a company that will be created from Bayer's planned spinoff of its industrial chemicals unit and part of its polymers unit.
Bayer announced the spinoff Nov. 7 to focus on products for health-care, nutrition and life sciences markets. The new publicly held company will include Bayer's ABS, nylon and polybutylene terephthalate businesses, but not PC, PU or TPU film maker Wolff Walsrode AG, which will remain with Bayer AG.
The as-yet-unnamed spinoff company is expected to have annual sales of about $6.4 billion and will employ 20,000 worldwide.