Expansions: Covestro starts up PU elastomers plant in Shanghai; Conventus Polymers sets up Singapore subsidiary to supply TPVs, nylons

German materials firm Covestro has started production in its new plant for polyurethane elastomers systems at its integrated site in Shanghai, China. Groundbreaking for it had been announced in summer 2022. The investment is in the double-digit million Euro range.

It is part of a series of investments in the Elastomers raw materials business the company undertook in the past few years worldwide, e.g. in its sites in Thailand and Spain. The new plant in Shanghai shall help meet ever rising demand for the material in the Asia-Pacific region, for example in renewable energy applications such as offshore cable protection and silicon wafer cutting rollers of photovoltaic panels, among others.

The polyurethane (PU) elastomers systems produced in the site can be used for a variety of end products. For offshore windpower, the protection of subsea cables is a core application area.

The material is also used in the manufacturing process of photovoltaic panels or in screening medias in the mining industry. In all of the above, it is designed for purpose in close collaboration with customers to withstand even the harshest of conditions thanks to its wear, tear and abrasion resistance.

"We want to support the growth of our customers and partake in the growth of key industries. As we expect the Elastomers market to grow above China’s gross domestic product, we want to enable our customers to capture it. That is what we do with our overall investments into our Elastomer business, and with this investment in our new plant in Shanghai right now," said Dr. Thomas Braig, Head of the Business Entity Elastomers.

The new plant is the latest addition to the Covestro Integrated Site Shanghai (CISS), Covestro’s single largest production site worldwide. CISS is now home to 12 plants. Since 2001, the company has invested about EUR3.7 billion into the site as of the end of 2022.

Holly Lei, President of Covestro in China, said, "Our company’s vision of becoming fully circular and our target of being operationally climate neutral by 2035 are perfectly aligned with China’s ambitions to be carbon neutral before 2060. The products we produce in CISS and this addition of polyurethane elastomers systems position us to make meaningful contributions to sustainability efforts in China and in the entire region, for example in the area of renewable energy generation."

CISS is also among Covestro’s ISCC PLUS (International Sustainability and Carbon Certification) certified sites. This means it is capable of supplying customers with drop-in, mass-balanced materials derived from renewable attributed products, thereby helping customers to reduce their carbon footprint. To make more sustainable products easier to distinguish, Covestro introduced the suffix "CQ". CQ stands for "Circular Intelligence" and identifies products containing a minimum of 25 percent alternative raw materials.

Meanwhile in other news, due to the tensions between the US and China and shift of moulding to Asia, US-based Conventus Polymers, a distributor of engineering thermoplastics, has established a subsidiary in Singapore, Conventus Polymers Singapore Pte Ltd, which will offer the company’s broad portfolio of products to processors and end users throughout Southeast Asia. The expansion into Singapore is part of the company’s overall business strategy to grow into key geographic regions.

Establishing a legal entity strengthens its position in the Southeast Asian market and allows the company to offer local service and support.to both local customers (plastic converters) and US-based OEMs that it currently supports. Singapore is the main business hub for Southeast Asia, which includes Malaysia, Vietnam, Thailand, Philippines, and Indonesia.

“Our business is growing quickly and with our extensive product portfolio of specialty engineering plastics, we are firmly positioned as a strategic supplier,” said John Jorgensen, president of Conventus Polymers. “This important move into Singapore signals our further commitment to local players along with key multinational OEMs.”

Conventus chose Singapore based on several factors including geographic location, ease of doing business, and tax laws. Jorgensen said many US-based OEMs are re-assessing risks associated with supply chains, resulting in an increase in moulding done in Vietnam, Malaysia, and Thailand. While the region was showing strong organic growth, it has been one of the main beneficiaries of the geopolitical tension between the US and China.

Considerable moulding previously done in China has moved to Southeast Asia among other places like reshoring to the US or near-shoring to Mexico or Costa Rica, said Jorgensen.

The Singapore initiative will expand Conventus’ reach into existing strategic markets such as electrical/electronics, building and construction, water management, consumer goods, energy, and healthcare, according to Jorgensen. With a legal operating entity in Singapore, Conventus can offer its international customers import and export capabilities, local inventory and warehousing, local currency transactions, and Delivered Duty Paid (DDP) Incoterms. Conventus will handle all exporting, importing, insurance, customs clearance, duty costs, and freight from port to warehouse to the customer.

To service the Singapore market, Conventus will establish a warehouse location which will support its Southeast Asian customers. The Singapore operation is currently being managed by China General Manager Harley Shi.

Conventus is selling the same global portfolio of products in Singapore including specialty nylons, polysulphones, thermoplastic vulcanisates (TPVs), and custom compounds.

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