Dynamic China to become the company’s main market
Big player, big chances
The world’s most populated country and second-largest economy, trillions of dollars in savings, numerous cities which have recently topped one million inhabitants – the shear dimensions of China are breathtaking. And then there’s the country’s impressive growth. Now the government in Beijing wants to make China more environmentally friendly with the focus on renewable energy resources and the development of new materials, a move that will provide materials manufacturers like Bayer MaterialScience with many interesting new opportunities. The company’s response is a large new investment program.
The new Shanghai Technical Center, with its facade of Makrolon® panels, is a visible sign of Bayer`s commitment to the Chinese market.
The meteoric rise of the Asian economies, the region’s relationship with the established industrialized nations, and the gradual development of a multipolar world order are just some of the issues that are regularly debated by discussion groups and futurologists.
The fact of the matter is that China is the world’s leading exporter and already calling the tune in many areas of industry. One example is the automotive industry. Within a very short time, the country has become the largest vehicle market in the world, in terms of both sales figures and production.
At the same time, China is addressing the key trend of electromobility, which will receive enormous financial support under the new five-year plan.
Battery-powered cars have to be lightweight and that means using the right materials. Polycarbonate is ideal for this purpose; the high-tech plastic can be used instead of heavier glass for vehicle glazing, among other things.
Around 60 percent of this material is already used in the Asia Pacific region, with the highest demand coming from China. These are obvious reasons for Bayer MaterialScience – the world’s largest polycarbonate producer – to strengthen its activities in Shanghai.
Major capacity expansion
At the outskirts of the metropolis, Bayer MaterialScience maintains one of its biggest production sites that has been strengthened with capital expenditures of more than 2 billion euros through 2012. This move is followed by an additional investment program of roughly one billion euros in the upcoming years, increasing annual polycarbonate capacities by 300,000 tons to 500,000 tons.
But Bayer MaterialScience will also be expanding production capacities for other raw materials at its Shanghai site. One of these is MDI, which is used to produce foam for climate-friendly thermal insulation, for example. Here, the company plans to double annual capacity to one million tons, thereby setting a new standard in the industry. This is in line with growth rates in the Chinese market which are expected to become double-digit in the next few years.
“The strong economic growth in China and in the whole region provides us with outstanding opportunities which we intend to exploit to the full,” says Patrick Thomas, CEO of Bayer MaterialScience. In 2015, the Greater China region is expected to be the dominant market for the company with sales rising from 1.8 billion to 3 billion euros within five years – an average annual increase of 11 per cent.
So it is only logical that the headquarters of the Polycarbonates Division has relocated from Leverkusen in Germany to Shanghai and that Bayer MaterialScience should intensify its research activities there. The areas of focus will also include wind and solar power – very much in line with the country’s new environmental targets.