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September 04, 2006 12:00 AM

Bayer MaterialScience inaugurating China MDI splitter

Utech Staff
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    By Liz White, UT editor

    Shanghai, China -Bayer MaterialScience AG is committed to providing the Asia Pacific polyurethanes market, including China, with top-quality raw materials and the best customer service: and this will be based on local production of raw materials using cutting-edge technology, said Peter Vanacker, head of Bayer's global polyurethanes business.

    Vanacker was speaking at a 4 Sept press conference which was the start of two days of events to celebrate, amongst other things, a milestone for BMS's polyurethanes business. This was the start-up in June of the group's first PU production unit in China, an 80 kilotonnes-per-annum (ktpa)splitter at BMS's production site at Caojing, to the south of Shanghai, which separates polymeric and monomeric MDI (methylene diphenyl diisocyanate) from the crude raw material.

    At the beginning of July, BMS shipped its first consignment of monomeric MDI from Caojing to Chinese fibre maker Zheijing Huafeng Spandex Co. Ltd, and has so far made more than 1100 tonnes of mMDI grades to tight specifications, said a company statement.

    PU leadership

    BMS claims leadership in polyurethanes raw materials, said Vanacker, with MDI capacity recently pushed up to one million tonnes and TDI (toluene diisocyanate) capacity planned to reach 441 ktpa by 2007.

    At the Shanghai site, BMS aims to use the most up-to-date, efficient and cost-effective processes, stressed Vanacker, allowing the business to offer both high product quality as well as utilise the cost savings to optimise its profitability. Another vital aspect of Bayer's strategy is innovation to discover new markets and outlets, he added.

    "A key factor in new process technologies is to be able to exploit them quickly," Vanacker commented, which is what BMS is doing with its 350 ktpa MDI plant at Caojing, due on stream in 2008, and a 160 ktpa TDI plant also being built there, due on stream in 2009.

    In Caojing, Vanacker explained, BMS will use two new production technologies in its isocyanates production. The first, in MDI, is an adiabatic process for making aniline from nitrobenzene, which reduces plant investment and production costs as well as making "much purer products," since there is no heat exchange, said Vanacker.

    The second is a gas-phase phosgenation process to make TDI, which cuts energy costs by one-third, and investment costs by 10 to 20 percent, Vanacker said.

    Some 69 percent of BMS's forthcoming Euros 856 million investment in the PU business unit will be in Asia Pacific, in strategic projects such as the MDI plant, which will be the "biggest single train MDI plant in the world," said Vanacker.

    BMS sees growth in Asia Pacific between 2005 and 2010 averaging 7.5 percent, bringing the local market share from 2.8 million tonnes of PU products to 4 million tonnes, or 37 percent of the global total.

    Vanacker said BMS makes 26 percent of both global MDI and polyether polyol production and 22 percent of global TDI production, and sees growth in its MDI business of 6 percent (2006/2008), in TDI of 4 percent and in polyether polyols of 4.5 percent.

    Polyurethanes form 45 percent of BMS's sales, at Euro 4800 million in 2005, said Vanacker, adding that this represents 2.3 million tonnes of PU products annually.

    Raw materials prices still rising

    Answering questions, Vanacker commented that raw materials feedstock prices have risen substantially over the last few years; "this is a big concern in the industry." So far, he added, BMS has managed to pass on these rises to downstream users, but it "remains a very important effect in the business." Bayer's commitment to building new plants using the latest technology and reducing costs is part of its focus in price containment, he added.

    Vanacker declined to be drawn on any plans for a further MDI plant in the region beyond saying BMS "has a clear strategy to be number one in TDI and MDI in the world," and that it will "maintain this leadership," by constructing new plants or expanding existing ones as demand warrants them.

    Vanacker said following a long period in which margins in the TDI business were "a disaster," they are now better. "I would say margins in TDI are healthy," currently, he commented. "But we are very concerned about raw materials prices." In toluene, BMS "has never seen such prices and we don't see them coming down," he said.

    For MDI, benzene prices, which were "rather static for ten years," have risen and continue to rise, he said, which is "a very high concern for the next years to come."I would say MDI margins are healthy," at present, but if benzene prices continue to rise then MDI prices will also have to go up, Vanacker said.

    "

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