On his recent visit to India to attend the inauguration of Covestro’s new trimer facility at Ankleshwar, Chemical Industry Digest, caught up with him and had interesting discussions on the prospects of growth of Covestro in India, particularly the scope and future of the market for coatings and adhesives using primary ingredients that Covestro produces.
Excerpts from this interview are reproduced here
Chemical Industry Digest (CID): How did the inauguration of your new facility at Ankleshwar go? Could you give us more details on what it will be producing?
Thomas Roemer (TR): The inauguration of our new trimer manufacturing facility at Ankleshwar went very well. Our team worked hard to set it up in a record time overcoming many challenges once we decided in 2022 to go for it. As you may know the Ankleshwar site was part of Bayer before Covestro took over, where they were producing products for crop science. We introduced many changes including the manufacture of TDI derivatives. Then we foresaw the amazing growth potential in India for trimers and that’s how we decided to put a plant for trimers in Ankleshwar. This is in line with the Indian government’s ‘Make In India’ policy. This facility will serve both the Indian and overseas markets.
CID: Could you please give detail of your other facilities and products manufacturing in India?
TR: Covestro has three production centers in India. In Greater Noida, we produce polycarbonate compounds. We have the thermoplastic polyurethanes (TPU) manufacturing in Cuddalore and in Ankleshwar raw materials for coatings are produced. We also have a strategic market development centre (SMDC) in Mumbai for coatings and adhesives, a color competence & design center for Polycarbonate and a Polyurethane system house in Noida. We are a customer centric company, to be closest to our customers so that we understand our customers’ needs and challenges. Then in our SMDC we develop solutions that exactly meet our customers’ requirements. So, all these facilities help us in demonstrating the product capabilities needed by our customers.
CID: In 2021 you had acquired the resins and functional materials business (RFM) from DSM. Do you have plans for more such acquisitions?
TR: The acquisition of the RFM business was the largest acquisition of Covestro. We were historically strong in the PU arena. This DSM-RFM acquisition has brought in more know-how in acrylics. We are still in the process of evaluating and understanding the vast potential this acquisition has brought to us. We are studying this from our customers’ perspective in terms of the additional solutions we can provide. And very recently, Covestro signs an Investment Agreement with Abu Dhabi National Oil Company, who has voiced its interest to acquire a majority in Covestro.
CID: How do you see the overall growth and opportunities for coatings and adhesives in India?
TR: I find that the potential for growth for coatings as well as adhesives in India is tremendous considering that the per capita consumption of each is far below the figures for developed countries. With India’s GDP growth steadily going up, the growth potential is simply fascinating. Our products are most suited to the needs of various sectors. We produce high quality PU raw materials and acrylic raw materials for high performance coatings that provide many functional benefits such as weatherability, durability, scratch resistance and aesthetics. The PU penetration in the paint industry in India is only 5% compared to the 20% and more in Western Europe and the US. So, if paint consumption goes up in India, our addressable market will be even faster growing, up to a tenfold increase in the near future. There are few other countries in the world where we see the potential of such growth.
CID: In terms of market segments, which are the most promising areas of growth in India and where do you see newer opportunities arising?
TR: In India our products find lot of applications in the mobility field including the automotive sector. Another very prospective area of growth, fast coming up is in the huge infrastructure area of construction involving roads, flyovers bridges, airports etc. Here I feel the use of polyurethane based products should go up. Take airports for instance, our Polyaspartic PU system can provide both protection and beautification as they provide both weather resistance as well as aesthetics. Most of these constructions use a lot of steel which also need coatings for protection. Another developing area is in furniture and wood working.
While all these areas are prospective, the fastest growth I would presume would be the mobility sector. PU based coatings can be used to paint and protect train compartments. These should not be solvent based as they release VOCs which are harmful. This is where we come in as our products are water based and thus environment friendly.
Another area is in packaging where it is enough to use monolayer films employing our PU based adhesive , which have good barrier properties. Also more brand owners are looking for the coated paper packaging solution to ensure the limits using of “plastic material “ which could enable the mechanical recycling whenever possible.
CID: We understand that high performance adhesives can also do metal to metal bonding avoiding welding or use of nut and bolts? Could you comment on such developments?
TR: Yes, metal to metal bonding is a very specialized area where high performance adhesives play a role. It all depends on what the specific use is for, whether it is metal to same metal or to different metal and whether the need for welding or bolts need to be avoided. There are also applications for adhesives for metal to rubber or metal to textiles or other surfaces where solutions based on our products are effective. There are other applications also for high performance adhesives like for shoes, particularly sports shoes, for flexibility and water resistance.
CID: What are the main directions of your technology development and R&D?
TR: There are always continuous efforts going on in R&D for enhancing the performance of our coatings and adhesives. This is an ongoing process. More importantly, efforts are on to become fully circular and sustainable in our processes and products. For example, we are ensuring that in packaging, our products enable better recyclability. For example, by using our adhesives for flexible film packaging, it can easily debond thus to enable the recyclability.
Meanwhile, there is a strong push for mono-material solutions in flexible packaging & paper packaging. Covestro could offer water-based barrier coating solutions in paper packaging to enable the recyclability. We also offer a board solution of primer, top coat , functional coating in flexible packaging for mono-material flexibles. Then what I mentioned earlier using water based PU coatings in train compartments and elsewhere enables sustainability avoiding generation of harmful VOCs.
To be fully circular, we are shifting to biobased content in our raw materials and here we are making big strides. Our DSM-RFM acquisition is also helping in this transition, with the Decovery® product line, containing high bio-based content. We are trying to replace fossil based raw materials with bio based ingredients and we trademark it as CQ for circular product. There is encouraging response from the market towards our bio based products and we will be moving faster in this direction. However, at this point of time, these bio based products come with additional cost and so we need both regulatory support as well as customer awareness and cooperation to take this forward faster.
CID: How are some of today’s major drivers: sustainability, circularity, energy transitions impacting your business? What initiatives have you taken to reduce the carbon footprint in your manufacturing?
TR: Covestro products are huge enablers for sustainability and recyclability. If you take polycarbon-ates which is another major area for Covestro, for instance it is easier to get an automotive headlamp made of polycarbonate, mechanically recycled as it is a thermoplastic material, whereas recycling is challenging for thermosets.
Our adhesives solutions are good for bonding as well as debonding. That’s why, I mentioned how our adhesives solutions promote monolayer film packaging that enables better recycling than multilayer pack-aging.
I can also state confidently that without Covestro products, coatings and adhesives which are enablers in energy transition, whether for solar or wind based electricity production, it would not be possible to get the performance and yield that are currently achieved. We are witnessing a huge market for us for such renewable energy projects in China where huge production of solar and wind energy products are taking place. I know that India also wants to develop, not only green hydrogen, but also solar in a big way and so Covestro will be happy to contribute in these areas in India. The other point mentioned earlier is in replacing fossil-based building blocks in our raw materials with bio based building blocks. In PU, we have already starting using bio-based building blocks like benzene.We are transiting to using more and more alternative raw materials with an ever-lower carbon footprint in our products.
Covestro has also given itself very strict timelines to move towards carbon neutrality. We want our operations (meaning scope 1 and 2) to be carbon neutral by 2035, and reduce our scope 3 greenhouse gas emissions to net zero tons of CO2 by 2050.”
One of the major shifts taking place is in using green source of power (electricity) or green energy. We have a couple of sites globally which are 100% based on green power. Covestro is sourcing green hydrogen and green ammonia. If India comes up with competitively priced green hydrogen/ ammonia, Covestro will be very much interested in purchasing from India as in our energy intensive industry we can reduce the carbon footprint in our manufacturing.
CID: How is your company deploying digital technologies such llOT, AI etc and integrating it with your business processes?
TR: Though I am not an expert here, I know that in our production we employ digital technologies particularly for predictive maintenance. We have also employed this in making smart laboratories which are fully digitalized. We have one of the most advanced digitalized laboratories in Leverkusen, Germany. The output from here is simply amazing. We are also training 100 experts, for AI for a variety of functions in various departments, in house. Here too, Covestro will ensure that we are ahead.
CID: So how do you look to the future growth, geographically in which regions and particularly in India?
TR: The trend today is that two thirds of chemical demand currently is in Asia and therefore, we see our future in Asia. Our strategy is to be as local as possible in the markets we are in. India with 1.4 billion people will be a huge growth market and we are strategizing on how to cater and be part of this growth in India. We are here to stay and grow.
This post was originally published on here
