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Bayer: Investments to foster growth and technology in China

Bayer MaterialScience AG : 04 April, 2005  (Company News)
In the presence of Han Zheng, Mayor of Shanghai, Dr. Hagen Noerenberg, Chairman of the Board of Management of Bayer MaterialScience AG, and Greg Babe, Head of Bayer MaterialScience for the NAFTA region, Peter Vanacker, Head of the Business Unit Polyurethanes of Bayer MaterialScience, and Dr. Juergen Dahmer, Country Speaker of Bayer MaterialScience for Greater China, signed an agreement with Ruan Yanhua, President of the Shanghai Chemical Industry Park Corporation, for the implementation of advanced process technology for Bayer
The ceremony was held during a visit of Shanghai’s Mayor Han Zheng to the Bayer facilities at the Baytown Industrial Estate in Texas, USA on April 1, 2005, in Houston.

Bayer is currently constructing facilities for the production of polyurethane raw material diphenylmethane diisocyanate (MDI) at the Shanghai Chemical Industry Park in Caojing. A production plant for polymeric and monomeric MDI from crude MDI and logistics facilities are due to be completed by mid-2006. In addition, Bayer will build a production plant for crude MDI scheduled to begin operation in 2008.

The Agreement for the design of advanced process technology for Bayer’s MDI plant is in line with the company’s commitment to implement latest technologies and state-of-the-art processes in all new plants wherever possible. Bayer has recently made technological process improvements to the technology of the MDI train such that the plant to be built in China will set a new benchmark for world-scale and efficient MDI production. Already to date, Bayer MaterialScience is the global leader in the polyurethane industry regarding capacity, product range and technology. The company is committed to continuously improve technology in this area.

MDI is used for example for the production of rigid foam products mainly applied in thermal insulation, e.g. for houses and refrigerators or other parts of the cold-chain. MDI monomer is used in applications such as shoe soles, synthetic leather and fibers.

“China is already one of our most important markets,” said Dr. Hagen Noerenberg during the signing of the agreement. “The country’s importance for the chemical industry and many other sectors will still increase in the coming years. Bayer wants to play a leading role in the economic development of the People's Republic by establishing technically advanced world-scale production facilities to serve the local markets. With our investments in Caojing, we are creating ideal conditions for strengthening our growth in this key market.“

Until 2009, Bayer plans to invest some USD 1.8 billion in new facilities for polymer production to be realized at the integrated production site at Caojing near Shanghai.

At the Caojing site, Bayer MaterialScience has been producing coatings raw materials of the Desmodur® N range already since early 2003 – thus Bayer has been the first of the international investors at the Shanghai Chemical Industry Park to start their local manufacturing at this site. Meanwhile, the company’s projects have advanced well, and until 2009 Bayer MaterialScience will start up one new world-class facility each year: 2005 already saw the expansion of the coatings project with the mechanical completion of the Desmodur® L facility. Another plant for the local manufacture of the coatings raw material hexamethylene diisocyanate (HDI) is scheduled for operation in 2006. Construction has started in October 2004.

Later this year, a compounding facility with a total capacity of 40,000 t/y is scheduled to start production, followed by a new world-scale production plant for Makrolon® polycarbonate. This plant will go on stream in 2006, and will gradually be expanded to reach a total capacity of 200,000 t/y – in line with market developments. Construction is well on the way.

A further focus of investment is the construction of world-scale production facilities for the polyurethane raw material TDI, which is used predominantly in the comfort sector for products such as mattresses and upholstered seating. The plants for TDI are scheduled to begin production by 2009.
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