Auto, electronics sectors to drive strong Bayer MaterialScience growth in region

The northern Southeast Asian countries for Bayer MaterialScience comprise Thailand, Burma, Laos, Vietnam and Cambodia.
Patrick Thomas, chief executive officer of Bayer MaterialScience, said in Bangkok that many clients in the main potential sectors of automotive and electronics were moving their investment to this rapid-growth region.
Bayer MaterialScience, which works closely with clients in developing products specifically tailored to serve local demand, sees the trend as an opportunity to boost growth in the region.
He said Bayer MaterialScience worldwide normally experienced growth of 5-6 per cent per annum. Growth in northern Southeast Asia had, however, been much better during the past 12 months, at 24-25 per cent.
The growth rate in southern Southeast Asia, which comprises Singapore, Malaysia, Indonesia, the Philippines and Brunei, was about 10 per cent.
The unit contributed €10 billion to €11 billion (Bt406 billion to Bt447 billion) to Bayer Group’s annual global sales of €30 billion.
“We’re happy if we can experience such a growth rate [24-25 per cent] in northern Southeast Asia,” he added.
He said some of the products Bayer MaterialScience was co-developing with clients were substitutes for conventional raw materials such as glass and metal in the automotive industry, the goal being to achieve lighter products.
The benefits are a reduction in energy consumption during the production process, and also when the substitutes are used in the final assembly of vehicles.
The company believes this strategy of making environmental friendly products will enable it grow sustainably, Thomas said.
Products for the automotive industry, which is categorised as the transport sector for Bayer Material-Science, contribute sales of about |€2 billion annually for the company.
He added that Asian carmakers seemed to be more progressive in the use of such new materials than their more conservative Western counterparts, as many of them are developing lighter vehicles aimed at reducing fuel consumption. This represents an opportunity for growth in the region.
“The key growth driver for us is our ability to follow the market’s needs. To follow the market is crucial for us. We therefore can develop products to serve real demand,” the CEO said.
Bayer MaterialScience annually allocates 3.5 per cent of its sales for research and development, Thomas added.
He said electronic devices were one major example of the company getting involved in developing smaller components, in this case making electronic devices more fashionable and lighter.
About €2 billion is generated annually from the electronics sector, which is a huge amount, Thomas |said.
Currently, many Bayer Material-Science customers in the sector are moving from China to establish manufacturing facilities in Southeast Asian countries such as Thailand, Malaysia, Vietnam and Cambodia.
Thomas said that for Southeast Asia, Bayer’s manufacturing plant in Map Ta Phut, in Rayong province, was the core production base for the company.
If Bayer decided to expand polycarbonate production to serve sectors such as automotive, electronics, medical, identification-card manufacturing, packaging and telecommunications, Thailand would be the centre for the expansion, he added.