Bayer to build major coatings facilities in China

US$ 110 million investment for new plants in Shanghai


Bayer is investing in the production of polyurethane coating raw materials in the People's Republic of China. New large-scale production facilities, to be built in the Shanghai area at a cost of US$ 110 million, will further strengthen the Group's global leadership position in the fast-growing market for coating raw materials. Construction is scheduled to begin in spring 2001. The business license for its wholly foreign-owned enterprise 'Bayer coatings Systems Shanghai Company Limited' was recently received.

The first phase of construction will create 11,500 tons per year of capacities for TDI- and HDI-based polyisocyanates, due to become operational in 2003, with expansion to 20,000 tons planned for the medium term. The capital expenditures for this first phase will amount to US$ 50 million.

The second phase will involve the construction of production facilities for the HDI precursor, at an additional cost of US$ 60 million, to complement a 30,000 tons-a-year HDI plant already being built in Leverkusen and due on stream in 2002.

These investment plans are Bayer's response to the continuing rapid increase in global demand for the raw materials used in high-performance polyurethane coatings. By establishing a strong manufacturing base in the People's Republic, Bayer is meeting the need for production facilities located close to the market. China is now one of the principal growth markets for coatings in Asia. Bayer also produces coating raw materials at facilities in Europe, North America, South America and Japan. The rise in world demand for coating polyisocyanates has been brought about by increasing quality requirements in applications such as automotive finishing, plastics coating, and wood and furniture finishing.

To support its market activities in the fields of coating raw materials, polyurethanes and plastics, Bayer will open a technical service center for polymers in Shanghai in mid-2001. The center will have the Bayer Group's worldwide expertise at its disposal, enabling it to provide optimum back-up to local customers.

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