Bayer receives approval to set up trading company in Shanghai

02-Jul-05

Bayer Material Science AG has indeed gained as a result of an alteration made in December 2004 in China's laws and regulations on trade and distribution. The revisions will permit foreign-owned companies to set up wholly foreign-owned enterprise trading and distribution companies in the province, having full import and export rights. Bayer Material Science AG has received an approval from the Chinese authorities to establish a trading company in Shanghai with an investment of about US$3 million. Through the company, Bayer is to set up its own local distribution network with import and export rights in China. Bayer is considered to be the first multinational company to be granted such approval. Bayer's trading branch aims to support the sale and delivery of products manufactured in Shanghai as well as from its other production centres around the world. The company will be operational from August 1, 2005 and in the initial phase, four branches will be set up in Qingdao, Chengdu, Guangzhou and Beijing. In the next five years, it will handle an expected sales volume of US$1 billion. Major contribution will be towards distribution of polycarbonate compounds or coatings raw materials (raw materials used in industries such as automotive, electronics, construction, IT and sports). Bayer is well positioned in the polycarbonate business in China, with an increasing market share of currently about 25%. Bayer is also planning to start the construction of a production facility for the polyurethane raw material diphenylmethane diisocyanate (MDI) at the Shanghai Chemical Industry Park in Caojing (SCIP). This facility, part of its approximately US$1.8 billion investment at SCIP, is considered the largest of its type in the world, with a design capacity of about 350,000 tpa, up from about 230,000 tons, is due to commence operation in 2008.