Bayer Material Sciences significantly strengthens its presence in China

Manufacturing News - 10.17.2008

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Bayer Material Sciences Significantly Strengthens Presence in China

The Startup of 350,000 tons/year of MDI* train and a groundbreaking for 250,000 tons/year TDI plant / Isocyanate production also planned to be expanded in Europe in the future.

Shanghai, October 17, 2008 - Bayer MaterialScience has successfully started production at its new 350,000 tons/year diphenylmethane diisocyanate (MDI) complex at the Bayer Integrated Site Shanghai (BISS). The new world-scale plant is the largest MDI facility of its kind in the world. Furthermore, the company has now broken ground for a 250,000 tons/year toluenediisocyanate (TDI) plant at BISS which is scheduled to come on stream in 2010.

"With these projects Bayer MaterialScience is emphasizing its
commitment to the growth markets in China and the whole Asia Pacific region. Innovative process technologies strengthen our cost leadership in isocyanate production and thus our competitiveness," said Patrick Thomas, Chairman of the Board of Management of Bayer MaterialScience, at a press conference in Shanghai on Friday. *MDI is a raw material used primarily for the production of polyurethane rigid foams, which have better insulating properties than any other material on the market. Two of their main applications are in the refrigeration chain and as thermal insulation in the building industry. TDI is used in large quantities in the production of flexible polyurethane foam for upholstered furniture, mattresses, and car seats.

For Bayer MaterialScience, China is already the most important market in the Asia Pacific region and currently its third largest national market worldwide. "We are confident that our materials will continue to exhibit good growth rates there," said Thomas. China is already the world's largest single market for polycarbonates, and it is expected to become the largest global consumer of polyurethanes by 2015.

The new facilities set standards for energy-efficient and environmentally-responsible production. The new TDI facility in Shanghai, for example, features the modern Gas Phase Process. This enables energy savings of up to 60 percent compared with a conventional plant of the same size. The new process technology uses up to 80 percent less solvent, and cuts investment costs for this type of large-scale facility by some 20 percent. "This enables us to further consolidate our leading position on the world market for polyurethanes with optimized cost structures," explained Patrick Thomas.

In addition, the oxygen depolarized cathode (ODC) technology used to recycle chlorine at the Bayer Integrated Site Shanghai yields 30 percent savings in energy use compared with conventional technology. Thomas pointed out how the company is contributing to China's efforts to improve the energy-efficiency of its industries: "By using advanced technology and an energy-efficient setup at the site, the Bayer Integrated Site Shanghai is able to save approximately 100 megawatts compared with conventional production plants. These savings can supply up to 10,000 homes," he said.

Just last month, the company started up its 20,000 tons/year polyurethane dispersions plant, which is the first unit producing waterborne polyurethane coating raw materials in China. Waterborne coating systems use little or no solvent, thereby reducing emissions of volatile organic compounds (VOCs) during application.

The company has also completed the construction of its second polycarbonate line, doubling its capacity for the high-tech engineering plastic MakrolonÂ® to 200,000 tons/year. The inauguration of this second production line will depend on how the market develops.

Products for improved climate protection are another growth driver in China. Bayer materials help to improve housing insulation, for example, by contributing to reduced heating costs and lower CO2 emissions. Over its entire life cycle, rigid polyurethane foam saves around 70 times as much energy as is used in its production. In addition to polyurethane insulating
boards, multiwall sheet made of MakrolonÂ® polycarbonate is another example
of the energy-efficient use of modern materials.

Bayer MaterialScience also plans to extend its isocyanate production significantly in the Europe, Middle East, Africa (EMEA) region in order to meet rising demand there. A new world-scale plant for TDI with an annual capacity of 300,000 tons is slated for construction at the Dormagen/Uerdingen integrated site in Germany. It will replace the existing TDI plants at the Dormagen and Brunsbttel sites. MDI production at Brunsbttel will be expanded to a total capacity of 400,000 tons/year by making use of the existing capacity of 160,000 tons/year and the existing infrastructure, and by converting the present TDI plant to an MDI facility.
Given the right business conditions, i.e. political acceptance and the availability of a suitable infrastructure for raw materials and energy, the two projects are scheduled to be completed by 2013 at a total investment cost of about EUR 300 million.

About Bayer MaterialScience:
With 2007 sales of EUR 10.4 billion, Bayer MaterialScience™ is among the world's largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, electrical and electronics, construction and the sports and leisure industries. At the end of 2007, Bayer MaterialScience had 30 production sites and employed approximately
15,400 people around the globe. Bayer MaterialScience is a Bayer Group company.

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