Bayer signed Agreement to build plant for the coating raw material HDI in China

05-May-2004

In the presence of Gerhard Schröder, the German Chancellor, and Wen Jiabao, the Chinese Premier, Werner Wenning, the Chairman of the Board of Management of Bayer AG, and Prof. Gottfried Plumpe, a member of the Board of Management of Bayer MaterialScience AG, signed an agreement with Ruan Yanhua, President of the Shanghai Chemical Industry Park Corporation, to build a world-scale production plant for the coating raw material HDI (hexamethylene diisocyanate). The ceremony was held during the third German-Chinese high-technology dialogue forum on May 4, 2004, in Berlin.

The HDI project involves a total capacity of up to 50,000 t/y and an investment of some USD 100 million. Construction of the new facility is scheduled to begin in fall 2004. HDI is a precursor for aliphatic polyisocyanates, which serve as raw materials for high-grade polyurethane coating systems. Such systems are used predominantly for automotive, industrial and plastics coatings.

Over the next few years, total investments of some USD 3.1 billion are scheduled for the integrated production site at Caojing near Shanghai. Of this, Bayer will spend some USD 1.8 billion on new facilities for polymer production - construction work has already begun in some cases. Other projects worth a total of USD 1.3 billion are also planned, but these will be tackled later.

With the building of large capacities for polyisocyanates, Caojing will become the main production site for Bayer MaterialScience's coating raw materials in the Asia-Pacific Region. Initial production capacity for the precursor HDI will reach 30,000 t/y by 2006. Depending on the way the market develops in the region, capacity could be extended by a further 20,000 t/y as part of a second construction phase. Since April 2003, coating raw materials in the Desmodur® N range have been produced in a neighboring plant that has an annual capacity of 11,500 t. At the end of 2004, a production facility for Desmodur® L with a capacity of 11,000 t/y is also due to go on stream.

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