11/17/2011

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Bayer plans further expansion in Asia

Of this figure, Greater China is planned to account for some EUR 6 billion. Dekkers also officially inaugurated a new production facility for TDI - a raw material for the production of flexible foams - at the Bayer Integrated Site Shanghai. During the event Dekkers explained the company's perspectives in the emerging countries in Asia. Twenty years ago, Asia accounted for only about 10 % of our sales, equivalent to just over EUR 2 billion. Ten years ago, this had grown to about 15 %, and last year the region accounted for 20 % of sales. In the Asian region, Bayer achieved sales of EUR 6.9 billion in 2010, including EUR 2.9 billion in Greater China, and anticipates further growth in Asia in 2011. "We have made capital expenditures of EUR 3.4 billion in Asia over the past 10 years, creating a basis for outperforming market growth in this region," added Dekkers. He explained that the company's success was due to strong local roots established in China, Japan and India over 100 years ago. "We are familiar with the markets, and we know how to tune our approaches to the different conditions prevailing in different markets in order to further expand our business," he stated. In addition, the region had grown due to the strong effect of " Megatrends” including growing population, improving healthcare and growing agricultural production.According to Dekkers, humankind must also bring the megatrend of climate change to a halt and start reversing it. Asia consumes more energy than North America and Europe combined, he said. "Products from Bayer MaterialScience not only help to save energy through high-performance thermal insulation in buildings or lighter-weight materials in vehicles, they also improve the performance of wind turbines, for example. And we take care to use energy-saving processes in the manufacture of our products."All the Asian countries are intended to play a part in achieving the sales increase targeted for 2015. Apart from China, this applies particularly to India, where sales are expected to grow from just over EUR 0.5 billion last year to about EUR 1 billion. Sales in Japan are planned to rise from just under EUR 2 billion to around EUR 2.4 billion. To meet these ambitious targets, Bayer intends to improve the availability of its products in Asia. "We already operate major production facilities here and intend to go on expanding in the future," said Dekkers.In addition, Bayer intends to participate in the region's transition to an innovation hub for the globalised world, through collaborations with the leading institutes and centres of expertise, as well as its own  R & D activities, and in doing so, Bayer intends to take account of Asia's particular needs.Bayer also plans to develop the necessary personnel resources, Dekkers continued. The company's Asian workforce has increased by nearly 8 % in the past 12 months alone and is expected to see a further rapid increase in employment in the coming years. The number of employees in Asia could increase from 23,700 in 2010 to more than 30,000 by 2015. Capital expenditures of some EUR 1.8 billion are also planned during this period.The Chinese market is of considerable importance for the MaterialScience business. For example, China is the world's biggest market for the construction industry, for automobiles and railway vehicles, for the electrical and electronics industry, and for shoe production. These industries are among the principal customers of Bayer MaterialScience. Last year Bayer MaterialScience had sales of EUR 1.8 billion (RMB 16.3 billion) in Greater China.New TDI plant dedicated
In the presence of numerous guests as well as high-ranking politicians and officials, Dekkers inaugurated a new TDI production facility with a planned capacity of 250,000 tons per year at the Bayer Integrated Site Shanghai. Dekkers also took the opportunity to outline the company's plans for a second phase of investment at the Shanghai Chemical Industry Park. "We have been operating at the Shanghai Chemical Industry Park for ten years," the Bayer CEO remarked. Bayer MaterialScience has invested EUR 2.1 billion in production facilities for all of its major products on this site. The company intends to follow this first phase of investment with a second phase. Bayer plans to spend a further EUR 1 billion to expand its MDI capacity to 1 million tons per year, increase its polycarbonate capacity to 500,000 tons annually and build a new HDI line that will raise annual capacity by 50,000 tons. "These are considerable capital expenditures involving significant capacity expansions. It goes without saying that we use the very latest technology in our facilities," Dekkers stressed.

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