Covestro committed to Chinese market
Print Edition
GERMAN materials manufacturer Covestro is committed to sharing Chinese technological innovations with the rest of the world.
Combining polyurethane resin with woven fiberglass, Covestro developed a new approach to producing blades for wind-turbines. Three folds of those blades measuring about 40 meters long in total can be molded at one time, much more efficient compared with the conventional way, and the emission of volatile toxins is reduced. Covestro has a team in China that is responsible for pursuing innovations in the Asia Pacific market. Seizing on the momentum of China’s green economy, the team added polyurenthane into wind blades to enhance their performance, aiming to touch China’s wind power generation market with great potential.
“Made in China” is no longer a prevailing strategy at some global manufacturers. As explained by Covestro Chief Executive Officer Patrick Thomas, previously China positioned itself as an export-manufacturing center, although “now more manufacturers are producing for domestic consumption.”
“Soon we will see... goods designed in China for the local market being exported worldwide,” Thomas told Shanghai Daily.
China is the world’s largest market for almost everything it consumes. In terms of its wind-energy equipment market, the country is on track to generate 250 gigawatts of electricity from wind equipment by the end of 2016.
“In Europe, you can never expect such an amount, as the market has reached saturation,” Thomas said.
Local needs
In Shanghai’s Pudong New Area, Covestro established a research center employing 200 scientists. The goal of the center is to support research and development for the global market, with local preferences serving as a starting point for innovation.
In April, Covestro presented an integrated medical device at 2016 China Plas, an international rubber and plastic exhibition. The machine is able to measure blood pressure and heart beat simultaneously, while also being compact enough to fit into a handbag.
Cooperating with a local partner, Covestro created a material for the device that is both durable and bacteria resistant.
Speaking proudly of this product, Thomas said such a device is perfect for the rural Chinese market, where high-quality devices are scarce and doctors often need equipment that can be easily transported.
The manufacturing technologies applied in this device aren’t new, but it is Covestro which saw new ways to apply them to the Chinese market.
Working closely with customers is one of the guiding principles applied by Covestro across all business sectors. The company sees this as paramount so that its scientists and customers can find solutions together.
Along with their researchers and developers, the marketing team at Covestro also keeps a close eye on developments in the speciality equipment industry. It was this team that identified the lack of quality equipment in China’s rural areas and then sought out a local partner for help building an integrated device.
Last year, China accounted for 15 percent of Covestro’s total sales. Independent from Bayer, its parent corporation until last year, Covestro now has more freedom to adjust its business strategy than before. Covestro has so far invested up to 3 billion euros (US$3.4 billion) in China. Last year, Covestro invested 260 million euros into R&D.
Despite China’s slowing economic growth rate, Covestro chalked up a 13.3 percent sales increase in the country in the first quarter of 2016. Thomas thinks it quite reasonable that such a large economy cannot continue to grow at double digit rates, as production remains enormous. Meanwhile, officials and entrepreneurs alike are increasingly focusing on quality rather than quantity.
These trends account for the reason why Covestro is stepping up its direct investment in China and also learning more about its specific market needs.
Tapping talent
Tongji University is part of a long-term partnership with Covestro, supplying it with students majoring in material and manufacturing sciences and to their research center. The group is also actively trying to recruit graduates from other leading universities.
“For Covestro, There is a lot more to come in Asia Pacific and China with very positive forward looking market growth in the region,” said Michelle Jou, President of Polycarbonates Business Unit. “We will double the production capacity of polycarbonates to 400,000 tons by the end of this year.”
In addition to its wind-power equipment and medical devices aimed at China’s green-economy and health sectors, Thomas said they’ve also been eyeing China’s automobile industry.
At Covestro’s exhibition booth at China Plas, staff also introduced charging towers for electrical cars developed by this company. They’ve already managed heat-resistance and anti-ultraviolet properties, which means a longer lifespan in outdoor use.
Once China starts the mass construction of charging towers, these products should be another demonstration of Covestro’s involvement in the country.
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