India to be formidable part of APAC growth strategy: Covestro

Covestro AG, which was formerly a part of Bayer Material Science, sees India as a formidable part of its APAC (Asia Pacific countries) growth strategy, a senior company official said. The German polymer major Covestro officially separated from the Bayer Group last year and has successfully established itself in the international capital market with a big stock market flotation. "Covestro strongly believes in the APAC (Asia Pacific countries) region; especially India which has been witnessing a double-digit growth. India comprises roughly 20 percent of our APAC revenues and it will be a formidable part of the Covestro growth strategy in the region," Covestro's Chief Financial Officer Frank Lutz told reporters here. Though China accounts for over 50 percent market share in APAC (Asia Pacific countries), the future growth will come from other countries, especially India, he said. Covestro is looking at India as a growth driver in coming years and expects robust rise in demand for its polymers. "India is a growing market and holds lot of promise. The three key industry verticals driving the growth for polymers and polycarbonates in India are automotive followed by IT and electronics and home furnishing. Automotive industry contributes approximately 25 percent of our revenues in the country," Covestro India Managing Director Ajay Durrani said. This one year of being an independent entity has helped Covestro evolve as a global manufacturer, he said. Covestro supplies polymers especially polyurethanes and polycarbonates and other specialty chemicals to key industries around the world, such as the automotive, construction, electronics, furniture, sporting goods and textiles industries. As part of major expansion plans, Covestro India had commissioned a second line for production of thermoplastic polyurethanes (TPU) in Cuddalore in Tamil Nadu last year, thereby increasing the capacity of the site to 6,000 metric tonnes from its current capacity of 2,500 metric tonnes. Durrani said, "The investment in Cuddalore is a testament to the confidence that the company has in the country. Bayer MaterialScience is now even better positioned to meet the strong global and local demand for TPU." Over the past 12 months, Covestro AG has completed a complex transformation process. Lutz, said the first year for Covestro as an independent entity has been busy with the materials manufacturer clocking a strong net year-on-year income growth of 51 percent. "The continued dynamic core volume growth stood at 7.7 percent year-on-year. EBIDTA has also significantly improved by over 18 percent and all debts taken from the parent company - Bayer have been repaid in full," he said. Covestro has 30 production sites around the globe and employed approximately 15,700 people (full-time equivalents) as of the end of the second quarter of 2016.