Bayer plans to set up Asian polyurethane

Bayer plans to set up Asian polyurethane

SINGAPORE (Reuter): German chemicals group Bayer AG is planning to establish a polyurethane manufacturing base in Southeast Asia and India in a bid to boost its presence in the region, a senior company official said yesterday.

"We are talking with potential partners in a number of countries...by the end of the year, latest first quarter we will be ready to announce one or the other of these new ventures," Reinhard Clausius, director polyurethane division said in an interview with Reuters.

"The main target is to increase our presence here in Southeast Asia and Asia as a total...we are talking very seriously about putting something in India."

Clausius was speaking after opening a polyurethane service center in Singapore at a cost of Singapore $10 million (US$ 7.15 million).

The center is jointly owned by Bayer and Hennecke Maruka Asia, a specialist polyurethane processor.

Polyurethane is used for the manufacture of products used in construction, automobile, refrigeration and furniture.

Bayer expects polyurethane consumption in Asia to grow between seven and 20 percent depending on the product application, with the automotive sector chalking up the biggest growth.

Clausius said polyurethane demand in Asia-Pacific region would reach 2.5 million tons, or about 25 percent of total world consumption, by 2000.

Bayer currently had just more than 10 percent of this market but hoped to raise this to the 25 percent mark after manufacturing plants were established in the region, he said.

Polyurethane contributed 3.64 billion marks (US$1.93 billion) to total group sales of 18.19 billion marks for calendar 1996. Clausius said Bayer's only Asian manufacturing base was an integrated joint-venture in Japan that was used to service both the domestic market as well as the region.

In order to raise capacity, Bayer has entered into a joint- venture with a unit of China's National Petrochemical Corp to build a 10,000 ton-per-year polyurethane plant at a cost of $10 million.

The project, with Jinling Petrochemical Corp, is 55 percent owned by Bayer and was expected to begin production later this year.

Bayer's other announced major investment in Asia, a $1.78 billion integrated complex in Taiwan to produce high quality polyurethane foam used in the furniture and automotive industry. was still awaiting government approval.

The Taiwanese authorities have called on Bayer to embark on a further environmental review of the project.

The first phase of the project was initially expected to start up in late 1998 but was now expected to be delayed by about a year.

A Bayer official said the company now hopes to begin construction next year and it normally takes about two years for the building of such a project.