Bayer MaterialScience AG has announced an investment of 1 billion euros ($1.3 billion) to add significant capacity for polycarbonate and MDI in Shanghai. The company also is relocating its polycarbonate business unit from Leverkusen to Shanghai.
Capacity for the polyurethane raw material methylene diphenyl diisocyanate will be more than doubled to 2.2 billion pounds a year, and for high-performance PC to 1.1 billion pounds per year.
Leverkusen-based Bayer MaterialScience said Dec. 9 that it is moving the PC headquarters to ensure even greater proximity to the booming polycarbonates market in Asia.
The expansion of our capacities in China is an important step in strengthening our presence in the emerging economies, said Bayer AG Chairman Marijn Dekkers.
Parent company Bayer AG wants to increase its total sales in Greater China to around 5 billion euros ($6.6 billion) by 2015, and it expects Bayer MaterialScience to contribute at least half of this amount, he said. In fiscal 2009, Bayer reported sales of about 2.1 billion euros ($2.8 billion) in Greater China, including 1.2 billion euros ($1.6 billion) from Bayer MaterialScience.
The strong economic growth in China and in the whole region offers us outstanding opportunities, and we want to make the most of them, added Patrick Thomas, CEO of Bayer MaterialScience. For us, it is strategically important to have the necessary capacities in the Asia- Pacific region to meet constantly rising demand.
Thomas emphasizes that is one of the biggest single investments to date for Bayer MaterialScience.
In terms of sales, China is the second most important country in the world for the MaterialScience group. The company is already investing 2.1 billion euros in Shanghai as part of a long-term project lasting until 2012. Together with these new expansions, this means a total investment of more than 3 billion euros ($3.97 billion).
A memorandum of understanding on the new projects has now been signed with the relevant authorities.
In Shanghai, Bayer plans to build a new MDI plant with capacity of 1.1 billion pounds annually. It also intends to expand capacity of its present MDI facility from 771 million to 1.1 billion pounds.
A further part of this investment is expansion of hexamethylene diisocyanate production. HDI is an important starting product for high-quality surface coatings, Bayer said.
BMS plans to expand the capacity of the existing HDI production to meet short-term market demand and then build a further 110 million-per-year HDI facility.
BMS also recently announced construction of five customer support facilities in Shanghai and three other Chinese cities. Those facilities will focus on customized production and further processing. The company has earmarked another 110 million euros ($145 million) for that project.
At a Dec. 8 news conference in Leverkusen, Dekkers addressed Bayer's overall strategy, saying that the firm is building on our strengths in the core business with polycarbonate and polyurethane and on great opportunities for new applications of these polymers.
As an example, he cited Bayer's close cooperation with its customers in the electronics industry, opening possibilities in the functional films sector.
Bayer's Wolfgang Plischke commented on Bayer's research efforts:
We have naturally further intensified our own international research activities with our Science Hubs in San Francisco and Beijing for health care, in Research Triangle Park [N.C.], for Bayer CropScience and the extension of the research and development center of Bayer MaterialScience in Shanghai, Plischke said.
European Plastics News senior editor David Vink contributed to this report.