Covestro expects above-market growth for polycarbonate business

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Photo by Caroline Seidel Jens Kaatze

Having just celebrated its second year as an independent company, Leverkusen-based Covestro AG expects its polycarbonates business to continue to outgrow the market.

According to Jens Kaatze who has recently taken over the commercial operations for the region Europe, Middle East, Africa and Latin America for the polycarbonate business unit, the global market for polycarbonates is expected grow at roughly 4% in this decade.

For the business, 2016 saw a 10.3% increase in volumes at 1.5m tonnes with revenue of roughly €3.3bn, covering 1/3rd of the company’s total sales.

The segment, which is Covestro’s second biggest after polyurethanes, saw particularly sharp increases in Asia Pacific and North America, with demand from electrical and electronics among the main growth drivers.

“We doubled our capacity in Shanghai from 200 kilotonnes per annum to 400 kilotonnes per annum and were basically sold out within the first half-year, which was even unheard of for us. So we immediately went back to the drawing board and planned to expand that unit even further,” explained Kaatze

The company announced its decision to add another 200 kilotonnes per annum of capacity to the plant in May this year, expecting to start production by 2019.

To maintain the momentum, the Covestro senior manager said, the company was also looking into expanding all its other production units around the world.

This includes smart measures like debottlenecking at its five globally spread base resin polycarbonate production plants.

The procedures could include, for instance, logistics improvements or enhanced waste water treatment, which are relatively cheap but can bring about significant capacity improvements, explained Kaatze.

A concern for this Covestro’s business is a recent decision by the European Chemicals Agency (ECHA) to list Bisphenol A (BPA) – a building block of polycarbonates – as a Substance of Very High Concern (SVHC).

“We take this seriously. It is a threat to any company, if someone wants to regulate one of its components. What the ECHA does in this context is looking into the intrinsic properties of BPA and not its possible effects at realistic conditions” said Kaatze.

 “So it is looking at the hazard of BPA per se, but is not looking at how likely it is to actually become a risk in reality.” the official added.

According to Kaatze, it is a matter of thresholds; and both  industry-sponsored and “independent high-quality (guideline) studies” have shown that there is no risk for consumers coming from real life BPA exposure.

“We constantly evaluate all available scientific evidence about BPA. Based on that we are confident that polycarbonate articles are safe for consumers and the environment in their intended uses,” Kaatze added.

This, Kaatze said, is confirmed by important authorities like EFSA and FDA.

As for bio alternatives to BPA, Kaatze said research so far has not found an alternative bio-based material to replace Bisphenol-A.

“Of course we’re looking into how we can do this even more sustainably.  But even if our feedstock would be bio-based, we would still have BPA. We have also been looking into producing bio-based materials with properties similar to polycarbonates without the use of BPA, and the answer has so far been that it seems impossible to meet the same property requirements,” the Covestro senior manager added.

In terms of growing trends in the industry, lightweighting particularly within the automotive and electronics segments stands out for Kaatze.

The company purchased a start-up composites manufacturer TCG in south east of Germany two years ago and has now scaled up production of continuous-reinforced composites, which can be used for many purposes, including automotive and IT.

The production plant in Markt Bibart, said Kaatze has now been scaled up to a commercial level, and is set to be officially started in early 2018.

While supplying to the automotive industry will take a while to be established, Kaatze first sees growth potential in IT, laptop covers and similar applications.

In addition to composites, the Covestro manager also pointed to two other major applications for polycarbonates: LED lights, where various components can be made of polycarbonates and the advent of 5G.

“The amount of data we are sending, whether it is in our private life or at industrial applications  will increase and 5G is going to allow for that. But 5G has requirements in terms of the housing around the signal stations and polycarbonate is ideal for that application,” explained Kaatze.

“I believe 5G is going to be big”, he added.


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