Covestro eyes coatings industry to grow PU materials business in India
In addition to top end customers, Covestro is banking on medium scale coating manufacturers to push the demand for its products in the country
Rakesh Rao | Mumbai January 29, 2016 Last Updated at 15:53 IST
Covestro, formerly Bayer MaterialScience, is eyeing industrial coatings market as growth drivers for its Coatings, Adhesives & Specialties (CAS) business unit in India. The unit offers polyurethane (PU) raw materials, which are used as building blocks in coatings and are versatile as they can be used on any substrate – metal or composite. India is viewed as one of the bright spots in otherwise gloomy global marketplace. This has also brighten the prospects of Covestro’s CAS business which supplies raw materials to industries such as coatings, automotive, footwear, electronics, etc.
“India is one of the fastest growing economies at present. While other emerging markets are slowing down, India is showing health growth rate of 7.5-8 percent. We see India as a big potential market for polyurethane based products as the penetration of these products are too low in the country. With end-user industries such as automotive, wood furniture, construction, etc, upgrading to new technology, the demand for PU-based material will increase, opening up huge opportunity for us. Over the years, we have invested in manufacturing facility (at Ankleshwar, Gujarat) and application centre (at Vikhroli, Mumbai) in India to support the local customer,” said Xiaobin Zhong, senior VP, CAS, APAC, Covestro, who was recently in India.
Globally, coating accounts for roughly 70 percent of CAS sale revenues, but in India, it accounts for about 50 percent. In order to expand its user base, Covestro is aiming to make major inroads into automotive sector for PU-based materials.
“Globally, auto OEMs is the biggest market for Covestro, but in India it is not as auto makers do not use PU-based coatings due to lack of awareness about the product. We are trying to change this by working closely with end-users and educating them about the benefits of PU over other conventionally used materials. As the users see value in PU-based products, we are sure there will be manifold increase in demand,” informed Dr Kumar Iyer, Head, CAS at Covestro India Pvt Ltd.
While PU-based coatings account for 60 percent market of Chinese wood finishing market, it is just 15 percent in India. Similarly, in China and some other Southeast Asian countries PU-based coatings are majorly used in two & three wheelers, while in India, it is still in the nascent stage.
Covestro expects India to follow global trend towards eco-friendly coating systems. This change is clearly visible in footwear industry, one of the major markets for Covestro’s PU-based materials. Footwear manufacturers, who were using rubber-based adhesives, now apply water-based adhesives in their products. While global players like Adidas, Nike, etc use only new-age adhesives, even Indian companies like Bata have made commitments to completely switch to water-based adhesives.
As environment awareness increases, Covestro believe India can also be a potential market for bio-based PU coatings. “We introduced bio-based polyurethane for coatings in Europe last year and the product is expected to be commercially launched globally next year. Though in India there is no market for bio-based PU in coatings industry at present, Covestro is hopeful the demand will ultimately come with tighter regulatory norms and need for sustainability among the end users,” commented Zhong.