Covestro to Open New R&D Centre for Coatings and Adhesives Near Mumbai
German material science firm, Covestro, is expanding its research footprint in India. The company, which operates through three business units – Polyurethanes, Polycarbonates and Coatings, Adhesives and Specialities (CAS) – will open a new R&D hub for the CAS business near Mumbai by the end of this year, according to Mr. Michael Friede, Global Head of the CAS business, which is a leading global supplier of high-performance materials to the coatings and adhesives industry and other specialties (films, elastomers, ingredients to textiles/medical/cosmetics). He was speaking to presspersons during his recent visit to Mumbai.
The company is also moving its corporate office from the erstwhile Bayer MaterialScience premises in Thane to a new location in Navi Mumbai. The new R&D centre will also be set up at the new location.
The company already operates a research & testing facility for CAS in Vikhroli, Mumbai. The facility focusses on a broad spectrum of coating, sealant and adhesive formulations used in segments like automotive, auto refinish, wood, construction and adhesives. It is equipped with a spray booth and other equipment to allow customers to explore productivity, efficiency and sustainability aspects of the offerings.
Covestro’s CAS business supplies over 2,000 products based primarily on six monomers and serves over ten high-end industries. CAS materials are critical to the performance of the final product, but form a small proportion of the overall cost. It is the smallest of the company’s three businesses with global sales of €2.3-bn last year – accounting for about 16% of total Group turnover.
According to Mr. Friede, the CAS business is the innovation driver for Covestro, accounting for almost half the €270-mn spent by the group on R&D last year. “We are committed to growing that as we go forward and the Mumbai R&D investment is part of that commitment.”
He pointed out that Covestro’s business in India has been growing at around 15-20% over the last few years and the current research hub in Vikhroli had become inadequate to serve growing customer demands.
“We have a long history of innovation in India for India as also for the world. But now we need to more than double the capacity at our R&D facilities here. We will be using the opportunity to upgrade all our facilities as we will be moving to a totally new location. We will be doubling the size and upgrading all the R&D capabilities in terms of machinery and processes,” informed Mr. Friede. He added that while the space and assets would be doubled, the research manpower would not be doubled right away.
“If we continue to grow 15% to 20% in India we will have to hire accordingly. We have roughly 400 people in India for Covestro in its entirety. We have a strong track record of hiring and will continue to do that if we grow the same way as in the previous years,” he observed.
Bedsides, the research centre in Mumbai, Covestro operates regional R&D hubs in locations like Shanghai (China), Jakarta (Indonesia) and Osaka (Japan).
Quizzed on the company’s investment strategy for India for all its businesses, Mr. Friede said the focus would be on upgrading existing infrastructure rather than setting up large-scale plants on the lines that the company already has in Shanghai, China.
“We have a very detailed long-term investment strategy for India. One example is the upgrade of the R&D facility. The other investments that we do is constantly debottlenecking our thermoplastic polyurethane plant in Cuddalore and upgrading the facility in Ankleshwar. For the next five years or so, Covestro will still have enough capacity globally at our large production hubs making base isocyanates in China, Europe and United States. So, any investments in India would be more on the downstream side. If India continues to grow at 15-20% for the next decades we may have to evaluate at some point of time as to make a larger investment also for base isocyanates. However, the current focus is on debottlenecking and making brownfield investments, rather than making a large greenfield investment,” emphasised Mr. Friede. “We are decently invested in all our three manufacturing locations – in Cuddalore, Greater Noida and Ankleshwar – to support the entire market in the region in terms of their requirements for downstream businesses,” added Mr. Ajay Durrani, Managing Director, Covestro India. The automotive and construction segments are the company’s biggest markets in India. “We are committed to support the government’s agenda for smart cities and smart vehicles and making a contribution to change in India going forward. Of course, we will also benefit from a business point of view,” noted Mr. Friede.
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