November 26, 2003 Bayer
Groundbreaking ceremony for a new polycarbonate plant at Caojing,
Shanghai
Bayer expands its activities in China
Growth opportunities in Asia to be maximized by using local
production / Total investment of 3.1 billion US dollars planned
http://www.news.bayer.com/News/News.nsf/id/700553F30BD43EC5C1256DE90037B383
With a groundbreaking ceremony
for the construction of a new polycarbonate plant at Caojing,
Shanghai, Bayer expands its activities in China. The company is
investing around 450 million US dollars in this world-scale
production complex which will produce the high-tech plastic
Makrolon®. This facility is expected to start
production in
the second quarter of 2006 and
will be expanded step by step according to the market
development to a total capacity of 200,000 tons per year. Makrolon® is used in a broad range of applications,
including the production of CDs and DVDs, headlamp lenses,
glazing and roofing systems.
There are plans to invest a total of around 3.1 billion US
dollars in the integrated production site at Caojing. Bayer has
allocated around 1.8 billion US dollars to the construction of
polymer production facilities and in some cases has already got
the construction under way. Alongside this are additional
projects with a volume of 800 million US dollars which are to be
implemented at a later point in time. Additional investments of
about 500 million US dollars have been allocated to
"NewCo". In this company, which is to become
independent, Bayer will pool its chemicals business and parts of
its polymer business with the aim of floating these on the stock
exchange under a new name by the beginning of 2005.
"The People's Republic of China is one of the most
interesting and promising markets worldwide and therefore has
highest priority in our strategic development plans", said
Werner Wenning, Chairman of the Board of Bayer AG at the
ceremonial start of construction in Caojing. Together with the
vice mayor of Shanghai, Yupeng Zhou, and the president of the
Shanghai Chemical Industry Park, Yanhua Ruan, the Bayer Chairman
planted, in front of numerous guests, a tree to symbolize a
prosperous development of the project. "The establishment of
the integrated site in Caojing is not only a major step towards
realizing our expansion plans in the Asia Pacific region, it also
provides a clear signal of our confidence in the growth prospects
for the Chinese economy as a whole", Wenning stressed.
Bayer's links with China go back to 1882, when the company first
began marketing dyes on the Chinese market. Today, Greater China
is Bayer's second largest single market in Asia, with sales of
around EUR 1.1 billion in 2002, and the company employs over
2,600 people there. The People's Republic of China is also one of
Bayer's main centers of global investment. The company is
represented in Greater China by a total of 22 companies. 15 of
them now have production facilities on stream in all business
segments in which the company is active and local production
accounts for an increasing proportion of sales.
The Asia Pacific region currently is the fastest growing region
in the world. As a result of dynamic development in important
branches of industry such as the automotive, construction and
electrical/electronics sectors, the demand for polymer products
is also rising strongly. "We are thinking long-term in our
Asia Pacific development strategy and plan to participate above
average in the anticipated growth in the region", said Bayer
Chairman Werner Wenning. "Polymers play a major role in
this, and the establishment of local production capacity is key
to serve our customers in the region even better. We are aiming
to increase the proportion of sales by the new Group company
Bayer MaterialScience in the Asia Pacific region from 18 to 25
percent by the year 2007. In China, we would like to more than
double MaterialScience sales in the next ten years", the
Bayer Chairman explained.
The new site at Caojing, in the south of the rapidly growing City
of Shanghai, is an ideal base for Bayer's future expansion plans.
"The Shanghai region, with its well educated specialist
staff and an excellent infrastructure, offers great conditions
for this", said Dr. Hagen Noerenberg, Head of Bayer
MaterialScience. Covering an area of approximately 1.5 square
kilometers, Caojing will see the construction of state-of-the art
world-scale production plants for polymer products in the next
few years. This would guarantee high quality and cost-effective
production, offering Bayer competitive advantages in the market,
Noerenberg added.
In total, Bayer is planning two additional major projects
alongside to the construction of the polycarbonate production
plant. The construction of production facilities for
polyisocyanates will make the site Bayer's most important basis
for coating raw materials in this region. Since April 2003, raw
materials in the Desmodur® N range have been produced in a plant
with an annual capacity of 11,500 tons. Currently, a plant for
polyisocyanate raw materials in the Desmodur® L range is under construction. After its
completion, which is scheduled for the end of 2004, Bayer will
have an annual capacity of 11,000 tons for this product range in
Caojing. There are also plans to build a world-scale production
plant for the base product HDI which will initially have a
capacity of 30,000 tons and be completed by the end of 2006.
Depending on the market development in the region, the capacity
can, in an additional construction phase, be extended to a total
of 50,000 tons per year. The raw materials, produced using the
most up-to-date technology, are used for the production of
high-quality polyurethane coatings for general industrial,
automotive, wood and furniture coatings.
Another focus of investment will be the construction of
world-scale production plants for the polyurethane raw materials
MDI (diphenyl methane diisocyanate) and TDI (toluene
diisocyanate). According to these plans, a production plant for
crude MDI with an annual capacity of 230,000 will go into
operation in 2008.
For TDI, the intention is to set up a plant with an annual
production capacity of 160,000 tons which is due to be
commissioned in 2009. MDI and TDI are important raw materials for
the production of polyurethane foams for items such as mattresses
and upholstered seating, and insulation for refrigerators.
Since the business with high quality materials is a business that
is close to the customer, Bayer has brought together the
activities for material research and for optimization of
formulations and applications in a Research and Development
Center in Shanghai. The state-of-the art Research and Development
center is thus fully at the disposal of the technical customer
service division in the Asia Pacific region. The range of
services extends from the development and testing of formulations
for polyurethane applications, through optimization of processing
methods (for example in the production of optical data storage
media from Makrolon®) to technical training of customers.
November 26, 2003
Ceremony marking the Start of the Construction Work for the new Bayer Polycarbonate Plant
Address by Werner Wenning、Chairman of the Board of Management of Bayer AGhttp://www.news.bayer.com/news/news.nsf/id/9F466177A10D76FEC1256DE9004C9D89
Thank you very much Mr. Konig for the kind introduction.
Mr. Han Zengh, Mayor of the City of Shanghai,
Mr. Ruan Yanhua, President of the Shanghai Chemical Industry Park,
Honored guests,
Ladies and Gentlemen,
It is my great pleasure to be here in Caojing today to celebrate with you the start of the construction work for our new polycarbonate plant.
Representing an investment of about 450 million US Dollar, this world-scale plant for the production of our transparent high-tech plastic Makrolon® will be the most advanced facility of its kind world wide.
This facility is expected to start production in the second quarter of 2006. From that time on, the production will be expanded step by step according to the market development to a total capacity of 200,000 tons per year.
Demand for polycarbonate, which is used in a wide range of applications from CDs and DVDs to automotive, electrical and electronic applications, continues to grow at 12 % per year in Asia Pacific. Demand is particularly strong in China, where we expect annual growth rates of 18 % on average.
Against the background of this market development, China has in recent years more and more become a focal point for the manufacturing industry, and we at Bayer firmly believe that the People's Republic is one of the most interesting and promising markets to invest in. China therefore has highest priority in our strategic development plans.
The establishment of the Bayer Caojing site is thus not only a major step towards realizing our expansion plans in the Asia Pacific region, it also provides a clear signal of our confidence in the growth prospects for the Chinese economy as a whole.
Altogether, there are plans to invest a total of around 3.1 billion US dollars in the integrated production site at Caojing.
We have allocated about 1.8 billion US dollars to the construction of facilities for polymer production at Bayer MaterialScience. These include alongside polycarbonate, a three-phased project to build up plants for the manufacture of polyisocyanates for the coatings industry as well as world-scale facilities for the production of MDI and TDI polyurethane raw materials.
Alongside this are additional projects with a volume of 800 million US Dollar which are to be implemented at a later point in time.
Additional investments of about 500 million US Dollar that we have envisaged for the Caojing site will form part of the business portfolio of "NewCo", a new company in which we will pool parts of our industrial business.
Ladies and Gentlemen,
Our commitment to Caojing is not only a clear vote of confidence for China as a growing market and investment location. It certainly is also a very good example for a "Win-Win-Situation" of all partners in this project:
For China, the Chemical Industry Park in Caojing and our joint venture partner Shanghai Chlor Alkali Company, the benefits are high foreign direct investment, a significant know-how and technology transfer and a great potential to create added value.
Bayer, at the same time, can develop a site in an excellent location with all the prerequisites for a competitive production and economic success.
We at Bayer are convinced that real success can only be based on a trustful and respectful partnership. Real success means shared success, and this is one of the fundamental principles for Bayer.
Let me thank our business partners, the City of Shanghai and - last but not least - our employees, for their great efforts to make this site in Caojing a showcase of modern polymer production.
As we start construction of our new polycarbonate plant today, and plans get under way for the next projects here at the site, I know that we can rely on your continued support.
Thank you very much for your attention.