Sep 6 2006
The dynamic development of the manufacturing, automotive and construction industries in China has created strong market demand for polymers products. Shanghai and the Yangtze Delta region are large potential markets with rich resources, a sound infrastructure and a well-trained labor force. The area is also centrally located at the heart of Asia-Pacific. This competitive edge undoubtedly makes Shanghai one of the most attractive places for investment for Bayer and its MaterialScience subgroup.
Bayer MaterialScience wants to make optimum use of the region’s outstanding growth opportunities. “In China, our local production at a world-scale base such as Bayer’s Integrated Site in Shanghai will lay a substantial foundation for realizing our targets for growth,” says Dr. Frank Roevekamp, Head of Bayer MaterialScience for the Asia-Pacific region.
In 1996, the Shanghai Municipal Government’s decision to build a large-scale chemical industrial park – the Shanghai Chemical Industry Park (SCIP) – in Shanghai led to Bayer’s selection of SCIP as the preferred location for its own world-scale integrated site. Bayer MaterialScience’s integrated site concept includes several individual projects that will be implemented gradually at the SCIP, serving various industries in the Chinese and Asia-Pacific market.
To date, work is well underway in Shanghai to build a chemical park with world-scale production facilities on a site covering 29 square kilometers. Bayer MaterialScience’s base within the Shanghai Chemical Industry Park encompasses some 1.5 square kilometers.
“The infrastructure and logistics within the Shanghai Chemical Industry Park (SCIP) will enable the permanent exchange of basic and raw materials, including with the other companies on site. This is an essential benefit if the companies are to generate maximum synergy from their combined presence here,” emphasizes Dr. Michael Boediger, General Manager of the Bayer Integrated Site Shanghai. “In addition, local production facilities in proximity to our key clients are a fundamental requirement for optimal serving the growing Asia-Pacific markets.”
Until 2009, facilities for the production of polyurethane coating raw materials, polycarbonates and polyurethane raw materials are being set up in three individual large-scale projects at the Bayer Integrated Site at SCIP.
Providing solutions for China’s needs – Bayer MaterialScience’s projects at the Integrated Site
Bayer MaterialScience’s polyisocyanates (PIC) production plant, supplying base-modified isocyanates (BMI) for the coatings industry, is the first of Bayer’s projects that has been realized at the site. Shanghai is set to become Bayer MaterialScience’s major production base for coating raw materials in the entire Asia-Pacific region.
The first phase has been completed in April 2003 with the start of Bayer’s polyisocyanates unit for the Desmodur® N range, used mainly in industrial, automotive and plastic coatings. This marked the beginning of the company’s first local production in Greater China with an annual capacity of 11,500 metric tons. This facility has also been the first one to go on-stream in the entire Chemical Park. For Desmodur® L grades, used for example in high-grade polyurethane coatings for wood and furniture, a facility with annual capacity of 11,000 metric tons was finished construction on January 18, 2005.
A world-scale production unit for HDI (hexamethylen-diisocyanate), with an initial annual capacity of 30,000 metric tons, has achieved mechanical completion, and is on schedule for its startup in early 2007. HDI is an important starting product used for polyurethane coating systems, which are mainly used for automotive, industrial and plastics coatings. Depending on market developments in the region, there will be scope to increase capacity further by an additional 20,000 tons per year to a total of 50,000 metric tons.
Construction for a second world-scale project for the production of the transparent high-tech plastic Makrolon® is now well underway. Makrolon® polycarbonate is used in the electrical/electronics sector, automotive and construction industries, in applications in packaging and medical technology and for optical data storage media such as CDs and DVDs.
After Baytown in the USA, Antwerp in Belgium, Uerdingen in Germany and Map Ta Phut in Thailand, Shanghai will be Bayer MaterialScience’s fifth production site for Makrolon® worldwide.
The new production facility for polycarbonates has an initial capacity of 100,000 tons per year.
Production will be doubled to a total capacity of 200,000 tons per year by 2008.
In its first phase of the polycarbonate project, Bayer started production at its 40,000 tons per year polycarbonate compounding facility on 30 June, 2005.
With the polycarbonate produced at the Shanghai site, Bayer MaterialScience will mainly supply its customers in China and in the Asia-Pacific region.
World-scale production facilities are also being constructed for the polyurethane raw materials TDI and MDI, both of which are used in the production of polyurethane foams. Flexible TDI-based foams are used in the comfort sector in products such as mattresses and upholstered seating. The main area of use of rigid foam products made using MDI is thermal insulation, in houses and refrigerators for example. MDI monomer is used in such applications as shoe soles, synthetic leather and fibers. A total capacity of 350,000 tons of MDI is scheduled to be available by 2008, and the completion of a TDI plant with an annual capacity of 160,000 metric tons is planned for 2009.
The new plants for MDI and TDI will be built against the background of growing global consumption of polyurethanes. The demand for this material has been rising consistently throughout the world for several decades and will continue to grow in the coming years. Already to date, Bayer MaterialScience is the world’s number one company in the field of polyurethane raw materials.
In this core business, the company wants to further expand its leading position, among others especially in the promising Chinese growth markets.
Focus on individual strengths - The benefits of an integrated site concept
The integrated site concept is based on the development of various different world-scale production facilities at one and the same location - a frame that allows optimizing common infrastructure making maximum use of the resulting synergy effects. The concept enables each production unit to focus on its core activities and utilize synergies much better than an individual site set-up. This is a prerequisite for the modern and cost-effective production of polymer products.
Infrastructure, utilities and logistical services – these are crucial elements for any globally operating business. Yet, they are not the core activities of the production facilities. Using a dedicated entity to provide these services is a more efficient way of doing business. It allows the production units to concentrate fully on what they can do best: Utilize state-of-the-art technology and processes to produce Bayer MaterialScience’s materials.
Common administration and dedicated services increase the site’s competitiveness and make it more attractive for new and incremental investments.
All the new production installations are state-of-the-art facilities, and Bayer MaterialScience’s extensive specialist expertise in the area of production technology guarantees that all the installations easily meet the standards imposed by the Chinese authorities and global st