New Polyurethane and Coating Plants in Shanghai to Boost Bayer’s Competitiveness in China

With the construction of new production plants for polyurethane and coating raw materials near Shanghai, Bayer MaterialScience AG is all set to increase its long-term competitiveness in the growth market of China. Dr. Hagen Noerenberg, CEO of Bayer MaterialScience, got the two big projects under way in a symbolic ceremony in the presence of the Shanghai deputy mayor, Hu Yanzhao. By 2006, a production facility for the coating raw material hexamethylene diisocyanate (HDI) and a production plant and logistics facilities for the polyurethane raw material diphenylmethane diisocyanate (MDI) will be built in the Shanghai Chemical Industry Park in Caojing. Bayer MaterialScience is the number one market player for both isocyanate coating raw materials and polyurethane raw materials. The two projects represent a total investment of around US$ 200 million.

A sum of around US$ 3.1 billion has been earmarked for investment in the integrated production site of Caojing near Shanghai, of which Bayer has allocated US$ 1.8 billion for the construction of new facilities for polymer production. Work has already started on some of the projects. "The Chinese market is key for our global growth strategy," said Dr. Noerenberg in Caojing. "With these large local production facilities, we will be able to serve our regional customers even better. We are thus set to increase our long-term competitiveness in this key market."

The HDI project involves a total capacity of up to 50,000 t/a and an investment of around US$ 100 million. This will make Caojing the biggest Bayer production site for coating materials in Asia-Pacific. HDI is a precursor product for aliphatic polyisocyanates, which are used as raw materials in high-quality polyurethane-based coatings. Such systems are applied predominantly in automotive, industrial and plastics coatings. By 2006, a production capacity of 30,000 t/a HDI will initially be built, and, depending on how the market develops in the region, the capacity can then be extended by 20,000 t/a in a second construction phase. The agreement on the building of the HDI plant was signed in May 2004 in Berlin in the presence of the Chinese Premier, Wen Jiabao, and the German Federal Chancellor, Gerhard Schröder. Bayer has been producing Desmodur® N coating raw materials in Caojing since April 2003 at a facility with an annual capacity of 11,500 t. At the end of 2004, a production plant for Desmodur® L is due to go on stream with a capacity of 11,000 t/a.

Bayer MaterialScience is initiating the first step in its plans to build MDI capacities at its Caojing site. A production plant for polymeric and monomeric MDI from crude MDI – a so-called "splitter" – and logistics facilities are due to be completed by mid-2006. The splitter will initially go on stream with a capacity of 80,000 t/a. This is to be followed by a second phase involving the building of a production plant for crude MDI with an annual capacity of 230,000 metric tons. This is scheduled to begin operation in 2008. For TDI (toluene diisocyanate), Bayer MaterialScience is planning to build a facility with an annual capacity of 160,000 t, which should be completed in 2009. In addition, a world-scale production plant for Makrolon® polycarbonate is currently also under construction in Caojing. It is due to go on stream in 2006 and, depending on market developments, will gradually be expanded to a total capacity of 200,000 t/a.

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