China expansions: Covestro banks on TPU production site in Zuhai; Arkema to double capacity for organic peroxides

German materials firm Covestro recently broke ground on its new Thermoplastic Polyurethanes (TPU) production site in Zhuhai, China. The investment had been announced in February. The new site will be built in three phases and is expected to achieve up to a maximum production capacity of 120,000 tonnes/year of TPU after the final phase of expansion. The mechanical completion of the first phase is estimated for 2025. This will lead to a production capacity of about 30,000 tonnes/year. The initial investment for this first phase lies in the mid double-digit million Euro range. The final phase is expected to be completed in 2033.

TPU is a versatile plastic material used in a variety of applications such as sports shoes, IT devices such as sweepers, smart speakers, phone cases, automotive applications like paint protection film or for the protection of wind turbine blades.

"We are excited to announce that the construction on our new TPU site commences. It shows our commitment to strengthen our production network for our Solutions & Specialties business entities overall and for the TPU business in particular," said Dr. Andrea Maier-Richter, Head of TPU at Covestro. "It reinforces our position as one of the leading global suppliers of TPU and puts us right where important value chains are."

Once completed, the site will span across 45,000 sq m. With its potential maximum capacity of up to 120,000 tonnes it will then also be Covestro’s largest TPU site worldwide.

"We are committed to working closely with our customers and partners," said Lisa Ketelsen, Head of TPU in APAC at Covestro. "As Guangdong province is a major hub for the IT, consumer electronics, footwear and other industries, we believe that locating our production in close proximity enables us to collaborate optimally. To underline that, an innovation center will be part of the next phase of our investment, enabling our researchers to design customised material formulas and do formula adjustments to meet customer demands within very short cycles."

The new TPU site will enable Covestro to provide high-performance yet sustainable solutions to its customers faster and more flexibly. At the new site in Zhuhai, Covestro shall to that end eventually offer products with the label "CQ". Products labelled as such consist of at least 25% alternative, non-fossil raw materials.

"Together with recent investments in new plants for elastomers, polyurethane dispersions and a production line for the mechanical recycling of polycarbonates in our site on the outskirts of Shanghai, this new site for TPU in southern China shall capture the robust growth of the core industries served by our Solutions & Specialties business entities in China, the region and worldwide," said Holly Lei, President of Covestro in China.

The company works on using recycled materials and can also already offer core materials with attributed alternative raw materials (such as biomass) via the mass balancing approach. Besides using less fossil-based raw materials, the company also want to use clean energy sources to run its plants and manufacturing processes and aims at becoming operationally climate neutral by 2035. By the end of 2023, it expects to already cover 16 to 18% of its energy demand from renewable sources.

In other news, French firm Arkema has announced a two-and-a-half-fold increase of its organic peroxide production capacities at its Changshu site in China. This investment of around EUR50 million will enable the group to support its Asian customers in fast-growing markets, particularly in renewable energies.

The start-up of the new Changshu plant expansion, for which the foundation stone was laid in September, is expected in early 2025.

Its Luperox brand organic peroxides are used as additives fulfilling a critical mission as reaction initiators for a wide range of polymers and in particular play an important role in the energy transition as vital components in the manufacture of photovoltaic panels, adds Arkema.

With this significant investment in Changshu (China), Arkema says it will support the strong expansion of Asian producers serving a fast-growing global market.

This expansion of the group's organic peroxide activities in China complements the 70% increase in its organic peroxide capacity in India announced in 2022, as well as the doubling of capacity at the Luperox 101 plant in Günzburg (Germany) which started up this summer.

These projects had notably enabled the industrial validation of several new and more efficient technologies, significantly reducing the environmental footprint of the organic peroxides business, says Arkema.

Subscribe to Get the Latest Updates from IMA  Please click here