By Nina Ying Sun, Plastics News Staff
Qingdao, China -- At the recent ground-breaking ceremony of its polyurethanes systems house and eco-commercial building in the suburb of coastal city Qingdao, Bayer MaterialScience AG elaborated on its aggressive investment and expansion plans as well as its mission to help improve life quality and environmental sustainability under China's 12th five year plan.
The high profile event took place just days after the company announced plans to build a systems house and a polycarbonate color competence and design center in the western Chinese city of Chongqing.
The 30 000-tonne-per-year systems house in Qingdao is scheduled to start production by 2012 and is set up for an expansion if needed, said Azita Owlia, BMS senior vice president, polyurethanes Asia Pacific.
"There is significant manufacturing activity in northern China and the new systems house will provide greater proximity to our customers. It will also enable us to meet the strong growing demand for polyurethanes in China, which is expected to grow at 7-10 percents on a yearly basis until 2014," she noted.
The Qingdao facility aims to serve local appliance makers such as Haier, shipping container manufacturers including CIMC and Maersk, as well as the booming construction sector.
Over the next 5 years, BMS will focus on helping China to improve life quality, conserve and generate energy, reduce emission, and develop highly efficient modern buildings.
For instance, only 15 percent of perishable food in China is refrigerated or frozen during transportation, compared to 90 percent or higher in developed countries, creating challenges to food safety and prices, consumers' discretionary spending, as well as land, water, and energy resources.
Refrigerated trucks and shipping containers can help bring fresh food to tables with less food preservatives, save energy, and raise farmers' income, Owlia said. Refrigerators in China alone are a 600 000 tonne-per-year market for PU.
Bayer also is making its own production facilities more sustainable. Its upcoming Shanghai TDI plant on gas-phase phosgenation, first of its kind in the world, uses 80 percent less solvent, 60 percent less energy, and 60 000 tonnes less of carbon dioxide per year.
Industry stats show that buildings are responsible for 40 percent of energy use and almost one third of greenhouse gas emissions worldwide.
With the real estate boom in recent years -- construction expenditures rising at 9.1 percent per annum, the Chinese government is aiming to reduce energy consumption in new buildings by 65 percent by 2020. However, PU represents a mere 2 percent of the building insulation in the country.
Meanwhile, fires caused by misapplication or quality issues of insulation materials are increasingly raising public concern. To solve the program, the industry needs to learn to "use the right products in the right places."
"We need to work with the government, either as an individual company or with industry associations, to make sure that we have the proper codes and the proper enforcement in place," Owlia said.
Education and management also play important roles. Bayer believes that the government will benefit from learning best practices from the rest of the world and developing effective management programs.
Bayer's first EcoCommercial building in China, under construction in Qingdao, will showcase wall insulation systems, roofing insulation systems, polycarbonate sheets as well as interior products by its partners. The company calls the 1000 sq.m office complex a milestone of sustainable construction in China and hopes to replicate its materials solutions across China.
Supply/demand and prices
BMS claims 22 percent of the global PU market, which Owlia expects to remain tight in the next few years.
While its competitors -- BASF, Wanhua, and Huntsman - are building large-scale plants, the additional capacity won't come on stream until 2014/2015.
Because prices were depressed for a while, some of the expansions were delayed, contributing to the current shortage, Owlia said. On a global basis, the industry needs 400 000 tonnes of capacity to come online every year to be able to support the demand growth. Therefore, the upcoming additional capacity would be absorbed very quickly.
"Would there be a short term overcapacity? Perhaps, depending on how the market develops. But I foresee the next few years to be a very tight market."
Combining the supply-demand situation with the volatility of raw material [benzene] prices, "we need to establish prices to pay for raw materials and upcoming investments."
Just like BMS' other 30 systems houses worldwide, the Qingdao facility will also position itself on a global basis and export to other regions when needed, she added.
Full article available at Plastics News, a Crain publication