Bayer invests $3.1 billion in Chinese production site.

Bayer has signed a basic agreement on a production site in Caojing, China with a total investment of $3.1 billion. Bayer signed the agreement with the Shanghai Chemical Industry Park Company Ltd. on October 31. Construction began November 2 in conjunction with the inauguration of Bayer's new Polymer Technical Center in Pudong. The total value of the company's investment program in Asia, initiated in 1994, will reach about $6 billion by the year 2010. Over the same period of time, Bayer plans to increase Asia's share in total group sales from 16 to 25 percent. At the heart of the agreement with the Shanghai Chemical Industry Park Company are the permits for the three core projects to manufacture coatings systems, thermoplastics and polyurethane raw materials. First in line for the new Bayer site in Caojing is a project to manufacture colorants and coating systems for use in the automotive, construction and furniture industries. Bayer will invest a total of $110 million until the year 2008. In a first construction phase, a production facility for the manufacture of polyisocyanates with a capacity of 11,500 tons per year (tpa) will be built, scheduled to come on stream in 2003. A second building phase will see the establishment of a unit for the production of the precursor product HDI. Bayer Coatings Systems (Shanghai) Co. Ltd., which is a 100 percent Bayer subsidiary, received its business license in December. The second project in Caojing is a world-scale facility for the manufacture of Bayer's polycarbonate Makrolon, established in step with the coatings production unit. Together with its joint venture partner Shanghai Chlor Alkali Co. Ltd., Bayer will establish a production complex for the manufacture of 100,000 tpa of polycarbonates in two stages. The initial production line with a capacity of 50,000 tpa will come on stream in 2003, with full capacity being reached in 2006. Total investment for this project amounts to $450 million and includes facilities for the manufacture of the precursor product Bisphenol A, as well as a compounding plant. Bayer holds a 90 percent stake in the new subsidiary Bayer Polymers (Shanghai) Co. Ltd., with Shanghai Chlor Alkali Co. Ltd. retaining a 10 percent stake. The third key project in Caojing is a large complex for the manufacture of polyurethane raw materials. The company will operate under the name Bayer Polyurethanes (Shanghai) Co. Ltd. as a 100 percent Bayer subsidiary. With total investment of approximately $1.1 billion, a capacity of 380,000 tpa of isocyanates will be established.