Leverkusen, Germany -- Bayer has announced investment of Euro 1000 million ($1322 million) to significantly expand capacity for MDI and polycarbonate at its Shanghai site.
Capacity for the polyurethane raw material MDI (methylene diphenyl diisocyanate) is to be more than doubled to one million tonnes a year and for high-performance polycarbonate to 500 kilotonnes per annum (ktpa).
Bayer MaterialScience said 9 Dec that it also intends to strengthen its research and development activities in China, and relocate the Polycarbonates Business Unit from Leverkusen to Shanghai. The aim is to "ensure even greater proximity to the booming polycarbonates market in Asia," BMS said.
"The expansion of our capacities in China is an important step in strengthening our presence in the emerging economies," explained Bayer AG chairman Dr Marijn Dekkers.
"We want to increase group sales in Greater China to around Euro 5000 million by 2015. MaterialScience is expected to contribute at least half of this amount." In fiscal 2009, the Bayer group in Greater China recorded sales of Euro 2100 million, of which Euro 1200 million was accounted for by 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 emphasises 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. It is already investing Euro 2100 million 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 Euro 3000 million.
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 500 ktpa and also intends to expand capacity of its present MDI facility from 350 ktpa to 500 ktpa.
A further part of this investment is expansion of HDI (hexamethylene diisocyanate_ production. HDI is an important starting product for high-quality surface coatings, said Bayer.
BMS plans to expand the capacity of the existing HDI production to meet short-term market demand and then build a further 50 ktpa HDI facility is also planned.
Bayer MaterialScience also recently announced construction of five customer support facilities in Shanghai and three other Chinese cities. They will focus on customised production and further processing. The company has earmarked a further Euro 110 million for this project.