BAYER MATERIALSCIENCE INTENDS TO EXPAND ANNUAL CAPACITY OF TDI PRODUCTION FACILITY IN SHANGHAI

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BAYER MATERIALSCIENCE INTENDS TO EXPAND ANNUAL CAPACITY OF TDI PRODUCTION FACILITY IN SHANGHAI
02 August 2007 - Bayer MaterialScience AG

Bayer MaterialScience AG intends to boost the annual capacity of the planned plant for producing toluene diisocyanate in Shanghai from 160,000 to 300,000 tons. This Bayer subgroup is harnessing an innovative process technology in the construction that, among other things, enables investment and energy costs to be dramatically reduced.

“This expansion reinforces our commitment to one of the world’s most important growth regions,” explained Chairman of the Bayer Board of Management, Werner Wenning. Bayer MaterialScience is planning to invest a total of around US$ 1.8 billion at the Shanghai site by 2009.

The integrated Shanghai site is intended to become a central base in Bayer MaterialScience’s production network in the Asia-Pacific region. The approval procedures for expanding capacity have already been initiated. “Our new world-scale plant is designed to supply customers in the region’s growth markets in the long term and is scheduled to be ready in 2009 as planned,” said Patrick Thomas, Chairman of the Board of Management of Bayer MaterialScience AG. The company intends to use part of its production capacity to supply the fast-growing markets in Eastern Europe and the Middle East until new capacities are in place.

Bayer MaterialScience expects its newly developed TDI process technology to cut investment costs by some 20 percent compared with conventional processes. The process, known as gas phase phosgenation, has already been successfully trialed in a company pilot plant with an annual capacity of 30,000 tons.

“This new technology sets new standards in safety and contributes to a significant reduction in the use of solvents,” explained Peter Vanacker, head of the Polyurethanes Business Unit. “Compared with optimized conventional processes, in operational terms this results in volume-related energy savings of around 40 percent and a corresponding reduction in costs and environmental impact. Our goal is to use this enlarged capacity to provide sustainable support for our customers’ growth. We intend to build on our leading position in the world market for polyurethanes with top-quality products, world-scale facilities and optimized cost structures,” added Vanacker.

The TDI plant in Shanghai forms part of Bayer MaterialScience’s long-term investment planning aimed at efficient expansion of its international production network to cover rising demand. The company expects consumption of TDI to grow by around 4 percent a year, driven mainly by continued strong demand for upholstered furniture, mattresses and car seats.

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About: Bayer MaterialScience AG
Bayer Corporation, headquartered in Pittsburgh, is part of the worldwide Bayer Group, an international health care, nutrition and innovative materials group based in Leverkusen, Germany. Bayer employs 23,300 in North America with net North American sales of 8.8 billion euros in 2003. Bayer’s three operating business areas – HealthCare, CropScience and MaterialScience, improve people’s lives through a broad range of essential products that help diagnose and treat diseases, protect crops and advance automobile safety and durability.

Bayer MaterialScience AG is one of the world's largest producers of polymers and high-performance plastics. The main customers for Its innovative developments in coatings, adhesives, insulating materials and sealants, polycarbonates and polyurethanes are the automotive and construction industries, the electrical/electronics segment and manufacturers of sports and leisure goods, packaging, and medical devices.

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