Bayer MaterialScience is one member of Bayer Group, the sales amount reached 860 bil Euro in 2004. It is an advanced supplier in hi-tech material and innovation system settlement. In the field of paint and coatings, the raw materials produced by Bayer MaterialScience are accord with various requirements in coatings industry, the applications not only include wood and furniture top coats, floor coatings, and also include automobile OEM finishes, traffic coatings, automobile refinishes, industry coatings, plastic coatings, anti-corrosion films, structure protection coatings, as well as roof water proofs and so on. Recently, Bayer MaterialScience held a “Bayer MaterialScience and Asiacoat 2005 Media interview” while participating Asiacoat 2005 exhibition. The chairman of Bayer MaterialScience Asia pacific coatings business, Mr.Mai, the general manager of Bayer MaterialScience China coatings Business, Mr. Li, the general inspector of Bayer MaterialScience Asia pacific Business expand and technical service Dr. feng attended the meeting. Our reporter had an interview of the meeting.

       Q: in recent years, Bayer invested many big projects in China . After the finishing of the first stage construction of the Desmodur N series in April 2003, which are mainly applied in industry, automobile and plastic coatings, and the start of the producing of Desmodur L series which are mainly used in high-ranking wood and furniture polyurethane coatings in 2005 January 18, in the end of 2006, the HDI factory with the annual capacity of 30000t will also be completed. In all these products, Desmodur L series are especially enjoyed a high prestige in China . And not long before, Beijing chemical industry university and Shanghai Huasheng Chemical Industry Company had jointly cracked thin film evaporator technology, made out comforting GB standardization low free TDI content hardener products. Compared with them, where is the advantage of Bayer company?

       Mr. Mai: Bayer is the first company which invented the method of removing free TDI monomers in the world, and we have been doing an excellent job in the aspect of reducing free TDI monomers. Meanwhile, the company has scale superiority. Because when using this technology, the larger the product scale, the lower the cost. In addition, Bayer has unique advantages in improving production effect, so we are very confident in keeping ahead of others in this area.

       Dr. Feng : Of course, we also congratulate to the achievement of our coating brothers, be gratified to the progress in the field of domestic coating raw materials. What our company supplied are not only one product, but also the expertise and completed service attached to the products. To coatings crafts, formed “a station” service system, this is the biggest advantage of Bayer MaterialScience.

       Q: Mr. Li has been contacting with China coating world for years, and has very high prestige in china coatings world. This time you take position as manager of Bayer MaterialScience coatings business in China, meanwhile are appointed to the commissioner of Society of Coatings and Finishing of CIESC, the very important organization in China coatings world, we wonder whether the policy of China market of Bayer MaterialScience coatings business will have any change? Is there any new act?

       Mr. L: I have 9 years work experience in China coating area. This time I am appointed to the commissioner of Society of Coatings and Finishing of CIESC, on one hand it's an affirmation to my work, on the other hand it's also an affirmation to developing exploration of Bayer and China coatings world sharing joys and hardships, hand in hand to get ahead. For years, our company insisted in bringing the latest technology to the Chinese market. Further more, the company always strive to be close to the customers. This time the activities of Bayer products technical seminar and “Bayer Night” which held at the same time with Asiacoat 2005 were one of the performance of the company implement this policy. Since 2004, our work teams in China , mainly salesman and technician, have enlarged 2-3 times. The aim also is to be close to our customs and provides better service to our customers.

       Mr. Mai: for 20 years, Bayer has been introducing new product, new technology into China market, and continually investing to localized production. Besides in possession of specialty products and embedded knowledge, company is in more need of people------excellent local talents, excellent work teams. Now we have Mr. Li, we have found most suitable local talent.

       Q: how about the development of Bayer products in China market?

       Mr. Mai: At present our products are still mainly on solvent-based coatings. However, we have seen the development trend of China market is more environment friendly and more low free TDI monomer content coating products, including high solid content technology, water-borne technology and UV curing technology and so on. We shall supply more these products in China market. We should guarantee our offspring live in a more comfortable, safer and healthier environment.

       Mr. Tong: I am in charge of automobile OEM finishes, big scale transport equipment coatings, refinishes, and plastics coatings business. We emphasize in three points: the first, high performance; the second, environment friendliness; the third, low cost. For example, in motor-cycle coatings, China motorcycle business occupies more than 50% of the world. At present two component polyurethane products are mainly in dominate of domestic market. Bayer could supply more environmental friendly products, such as high-solid content and water-borne products. As to automobile OEM paints, Shanghai General, Tianjin Toyota, Guangdong Toyota and so on company are all using water-borne primers. Europe, America , Japan , Korea and so on are also using these systems already. Bayer expects that more enterprises in China adopt this system. And our company will supply the technology.

       Dr. Feng: I am in charge of industrial coatings. In the field of wood industry, the application of polyurethane is very extensive. The developing trend is more environmental friendly green products, especially domestic furniture industry exports large amount of furniture to European and American countries. The demand of environment friendly products of customers drives China wood coatings industry developing towards environment friendly trends. In the application of water-borne coatings, abroad almost have experienced 10 years. Compared with them China goes much faster. In anti-corrosion coatings and floor coatings, the developments of polyurethane coatings have big potentials. Although their preparation is not high at present, with the increasing of China people living life quality, the demands of more environmental friendly coatings products will increase rapidly. So the market prospect of these polyurethane coatings is bright. Our company will supply more products in these areas to meet with the demands.

       Mr. Mai: Desmodur series products had been produced in German about 40-50 years before, the goal at that time set to the field of wood industry. China wood industry has very big market. Bayer had begun the construction of Desmodur L 75 industrial production equipment three years before. In January 2005, it formal put to production. China customers at present have already purchased local product of our company, no longer use imported products. Now that the capacity of Desmodur L75 is 9000t/a in Shanghai Caojing zone. Besides supply for China customers, we also supply products for Asia-pacific customers.

       Q: recently, the soar of petroleum price bring the sky-rock of raw materials, had Bayer products been influenced? How Bayer to maintain the profit?

       Mr. Mai: Bayer products are raw material of coatings industry, but we also have the problem of raw material supply. Our company has made some adjustment to the price of L series products since this year. Because China coatings industry has strong competition in low cost, the customers of Bayer suffered very heave pressure. However except recently a little surge of price, in general the price of Bayer Desmodur products is decreasing in this year in China market. This is mainly for consideration of our customers.

       Dr. Feng : technically China coatings market is very complicated. There are all kinds of demands. Many foreign companies often complain that they can't handle. Bayer's success lies in putting local products to local market to meet with the local demands.

       Mr. Mai : as the topic of cost of coatings industry, we should not only see the raw materials, neither only look on the cost of coatings production, we should look on the whole production chain cost. This should add Bayer expertise and the service Bayer offered to the customers. That means the whole set of solving plan Bayer offered to the customers. Bayer makes the customer's products dried 2 times faster than before, and the cost 2 times lower. This combined reduces the integrated cost of the customers. Bayer MaterialScience is not a company aimed to commercialization but the one using our expertise to give full set solving plans for the customers.

       Q: the Bayer MaterialScience Trade (Shanghai) Lt. Co. began to run in August 1 st this year, this makes Bayer become the first foreign company got the allowance of the country to directly conduct Chemicals RMB business since China entered WTO. What kind of function will do in reducing the final cost of the product reached to the terminal customers?

       Has Bayer considered cooperating with domestic academies in the application and development of the products?

       Mr. L : at present franchiser is still a very important sales section of Bayer Company. Because Bayer directly conducts trade also has certain costs. This includes personnel, storage, and transport and so on. So we got this trade qualification, the more important meaning is that we have chance to contact with the customers, more effectively provide technology and methods of solving the problems. Therefore, the distributor of our company in South and North China Shanghai Huarong and Shenzhen Puruisen will be our long term cooperation partner.

       Dr. feng: Our company has realized that to develop local products must have local service to keep up with. The company has been exploring the possibility of cooperating with local academies. A few projects have already launched, such as the cooperation with Shanghai organic institution. This will make great help to the company business. So our company will develop this kind of cooperation relationship further more.