China becomes Covestro's largest market in 2017

German company's sales grew 8% annually last year as it tapped China's rising prices of chemicals. 

German plastics and chemicals producer Covestro said China became its largest single market last year as the company's sales volume grew 8 percent annually, which rode on China’s rising chemicals prices.

Covestro reaped over 3 billion euros (US$3.7 billion) in sales in China, which accounted for 22 percent of its global sales of 14 billion euros last year, it said today.

The company's sales volume in China was followed by Germany where they gained 6 percent while the United States came in flat from a year ago.

Covestro has benefited from rising prices of specialty chemicals and its applications, “both echoing China’s rising efforts in sustainability,” said Bjoern Skogum, the company's president for China.

China’s chemical industry grew fastest over six years in 2017 with profit rising in most of the chemical products, according to the Ministry of Industry and Information Technology.

Covestro has benefitted from rising prices of methylene diphenyl diisocyanate, or MDI, one of its main materials in China, which have doubled from January to October last year.

MDI outperforms most composite materials in insulation and flexibility to help save energy and cut carbon emissions.

Covestro’s Caojing production site in Shanghai, its largest globally, will expand MDI capacity to 500,000 tons per year in coming years from the current 460,000 tons a year amid rising prices, Skogum said.

The company also plans to benefit from new applications in China by collaborating with domestic wind blade producer Zhuzhou Times New Materials Technology Co to install Covestro's polyurethane into wind blades to help improve energy efficiency.

The collaboration is part of Covestro's plan to fit into China’s sustainability efforts, with the nation taking up 43 percent of newly installed capacity in global wind energy in 2016, according to the Global Wind Energy Council.

By 2025, the company aims to ensure 80 percent of its research and development spending links with sustainability, “which is also in line with China’s focus,” Skogum said.

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