InterviewBayer sees strong polycarbonate growth in China - exec

12 October 2011 22:01  [Source: ICIS news]

NEW YORK (ICIS)--Bayer MaterialScience (BMS) expects strong polycarbonate (PC) demand growth in Asia, particularly China, justifying its planned capacity expansions, a senior executive said on Wednesday.

Going forward, more innovation in PC applications “will come from Asia-Pacific,” said Michael Koenig, head of the polycarbonates business unit and a member of the executive committee of Germany-based Bayer MaterialScience (BMS), in an interview with ICIS.

“This is why we are investing heavily there - not just in production assets, but into innovation and an expansion of our research centre,” he added.

BMS will be investing €1bn ($1.3bn) to expand its methyl di-p-phenylene isocyanate (MDI), PC and coatings production in Caojing, Shanghai, China.

While BMS sees a slowdown in the general global economy, PC growth projections for the region are unchanged. Overall, global growth “is seen at 6–7%/year” going forward, and “more than 10%/year in China,” said Koenig.

“The use of PC in China is both penetrating into new markets and being used more in its already established [markets],” he noted.

In China, electronics are “developing well,” while “automotive is a fantastic success story - especially in more high-end cars,” said Koenig.

The company plans to double its Caojing PC capacity to 400,000 tonnes/year by 2013, with a start-up in 2014. The company will then debottleneck its PC production by 100,000 tonnes/year, to 500,000 tonnes/year by 2016.

With 67% market growth coming off of 3.5m tonnes of demand in 2010, Koenig said he is not concerned about oversupply.

“You need [around] 200,000 tonnes of additional capacity every year in order to grow industry capacity with the market,” he said.

“In the end, what the industry really needs to do is ensure that there is enough material available, and the current announcements are accomplishing just that,” he added.

The Caojing investment is part of an effort by parent group Bayer to increase its sales in China to €5bn by 2015. BMS is expected to contribute at least one-half of that amount.

BMS has about 60% of the PC market in Asia, with about one-half of that in China, said Koenig.

“We predict that until 2015, we will have… [roughly] two-thirds of the PC demand in Asia. For that reason, we moved our PC headquarters to Shanghai” in July, he said.

Moving PC’s headquarters to Shanghai “changes our focus,” the executive added.

Higher-than-average growth is projected by BMS in the medium-term for new applications, such as renewable energy - particularly solar modules - and light emitting diodes (LED).

“LED lenses can be moulded cheaper than before,” and with their energy-saving potential, governments have been “pushing LEDs,” said Koenig.

LEDs will be a “very significant market” for PC going forward, but optical data storage, like CDs and DVDs, “is a declining market,” he noted.

($1 = €0.73)

For more on polycarbonate visit ICIS chemical intelligence

By: Ivan Lerner
+1 713 525 2653

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