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Bayer to Build Factory Complex
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German petrochemical giant, Bayer AG, will spend US$1.8 billion building a petrochemical complex in Shanghai over the next four years, senior executives said yesterday.


Bayer MaterialScience, which makes petrochemical materials, will be based at the Shanghai Chemical Industry Park.


This venture will be the largest and most modern polyurethane operation in the world, Frank Grunert, vice-president of Bayer MaterialScience's Asia-Pacific business, told reporters yesterday in Beijing.


The total investment includes the world's largest facility to produce polyurethane raw materials, plants to produce other petrochemical products, as well as infrastructure and logistics.


Polyurethane is widely used in tough chemical-resistant coatings, adhesives and foams.


The Shanghai government decided to build a large-scale chemical park because it wants to meet surging domestic demand for chemical products and to drive the local economy.


A number of global giants, including BASF, BP and Sinopec, are interested in the park.


The centrepiece of Bayer's Shanghai petrochemical complex will be a plant to produce the polyurethane raw material diphenylmethane diisocyanate.


The firm hopes to have an annual capacity of 350,000 tons by 2008, a Bayer statement said.


A further focus of investment at the site will be a plant to produce another polyurethane raw material, toluene diisocyanate. This is scheduled to be completed in 2009.


Bayer hopes this move will put it in a strong position to meet demand for polyurethanes in China and in Asia.


In this region, the industry is expected to achieve annual growth of up to 8 percent up to 2010, Grunert said.


"Our aim is to raise the level of sales generated in the Asia-Pacific region from 18 percent in 2003 to 25 percent in 2007."


"In China, our target is to more than double our current sales over the next 10 years," Juergen Raab, also of Bayer, said in a company statement.


The Bayer MaterialScience division posted sales of 8.6 billion euros (US$10.3 billion) last year.


Its products are used extensively in industries such as car manufacturing, electrical engineering and construction.


Seeing the huge market potential in China for energy-saving products, the company yesterday introduced its new building material, called polyurethane rigid foam.


This could significantly reduce energy consumption for heating and cooling, it said.


(China Daily March 30, 2006)


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