Covestro inaugurates regional hub in Thailand
COVESTRO, a Germany-based manufacturer of high-tech polymers, has inaugurated a regional headquarters in Bangkok as it seeks to strengthen its foothold in Southeast Asia.
The Asean region is of growing importance for Covestro as it represents the company’s second-largest market in the Asia-Pacific region after China. Thailand was chosen as the new regional hub because one of Covestro’s eight largest production facilities is situated in Map Ta Phut, an industrial region on the Gulf of Thailand. At that site, the company mainly produces polycarbonate, which is a high-tech plastic used in many areas of daily life.
Covestro’s portfolio also includes raw materials for polyurethane foams as well as for coatings, adhesives and speciality products.
The new headquarters was opened on Thursday in the presence of Frank Lutz, Covestro’s chief financial officer.
“As a world-leading supplier of high-value polymers and innovative solutions for thousands of customers in key industries such as the automotive, construction and electronic sector, Covestro is well positioned for success,” he said. “Our investments and portfolio are strategically situated and fit to the market.”
Samir Hifri, president of Covestro Thailand Co, added: “Our company is very well prepared to meet the needs of our customers and end users by being present in the Asean region with the full range of business activities such as world-class productions assets, technical laboratories, [and] highly competent commercial and technical people.”
Third largest economy
Hifri also stressed the importance of the Asean region for Covestro as it is the third-largest economy in Asia, with a combined gross domestic product of US$2.5 trillion.
“With the newly established Asean Economic Community, Covestro is looking at Asean with high interest,” he said. “A well-managed AEC will expand economic activity, grow the middle class and stimulate further demand for our products and solutions.”
Having the third-largest population in the world with 622 million people, the Asean region faces challenges in housing and food security. Covestro says it tries to ensure that people at the bottom of the social pyramid have access to its innovations.
“In keeping with our mission ‘to make the world a brighter place’, Covestro offers its products and innovative solutions to help address the basic needs of people and help in their sustainable social and economic transformations through collaboration with government institutions and non-governmental organisations,” Hifri said.
“Each solution from every stakeholder must contribute positively towards the environment and create value to every stakeholder.”
Covestro has partnered with Habitat for Humanity and private partners for the construction of an initial 1,000 affordable but calamity-proof houses in the Philippines, which were struck in 2013 by the strongest typhoon in recent history.
In the area of agriculture, Covestro is replicating solar-dryer technology using its polycarbonates as well as cold storage that uses its polyurethanes for the agro-enterprises of farmers in Thailand, Vietnam, Indonesia and Myanmar.
Lutz emphasised that Covestro continued with its positive momentum after its independence from Bayer in September and going public in October.
“Following a successful third quarter, we see confirmation of our confidence for the full fiscal year. We expect a substantial increase in profitability in 2015. Also, free operating cash flow is on track for a new record,” he said.
A recent milestone was the listing in the MDAX stock market index, making it one of the 80 most important listed companies in Germany, where Covestro is headquartered. “We accomplished one of Europe’s most successful IPOs| [initial public offerings] in 2015,” Lutz said. “The Covestro share price has developed well since our IPO|on October 6 and is now well |above the issue price of 24 euros. Our stock is now trading at around 34 euros [Bt1,340] and trending upward.”
Covestro has a clear strategy, the main purpose of which is to achieve further profitable growth.
This should be supported by favourable dynamics of its core markets and industries, which are expected to grow faster than the world economy in the years to come.
“The basis for our future success is continuous innovation, and we embrace sustainability in everything we do,” Lutz said.
Covestro says its further competitive strengths are its leading and defendable global industry positions based on a focused product portfolio and global scale as well as its well-invested, large-scale asset base and competitive cost position.
Furthermore, its high-value raw materials for coatings, adhesives, sealants and other specialities show an attractive and historically resilient margin profile, it says.
