Covestro Deutschland AG, a German supplier of polymer materials, has announced a third manufacturing plant for special film in Thailand.
The Leverkusen-based company has chosen to built the new production facility in Map Ta Phut, Rayong province.
The site is expected to be completed and commence operations at the end of 2019.
Michael Friede, executive vice-president of Covestro Deutchland AG, said the plant is based on modern co-extrusion technology, but he declined to provide further information about total amount invested, which is included and outlined in the parent firm's global budget.
The new facility is expected to help meet increasing demand for laminate coatings in the Asia-Pacific region, which is expected to grow in parallel as demand for tailor-made laminate coatings in many sectors -- from security card applications to automotive, displays and hand-held electronic devices -- continues to rise.
Michael Friede, executive vice president and head of business unit coatings, adhesives and specialties of Covestro Deutschland AG.
In Thailand, Covestro operates three business units: coating adhesive and specialties; polycarbornate; and polyurethane.
Founded in 2006, Covestro Thailand Co operates the polycarbonate manufacturing site at Map Ta Phut Industrial Estate and a systems house at Bangpoo Industrial Estate.
The local arm provides ready-to-use polyurethane systems for the manufacture of heat insulating foams used in construction, refrigeration and water heaters, as well as special applications for automotive, footwear and sports equipment manufacturers.
Covestro employs 728 workers locally, and current production capacities of polycarbonate and bisphenol stand at 275,000 and 260,000 metric tonnes per year respectively -- with more than 50% of output earmarked for export.
Apart from the sites in Thailand, Covestro has facilities in Indonesia, Malaysia, Singapore and Vietnam.
"The growth rate for Covestro in this region is expected to exceed the regional GDP growth of 1-2% in 2018," Mr Friede said.
The National Economic and Social Development Board (NESDB) forecasts Thai GDP to grow between 3.6% and 4.6% in 2018, based on an export growth forecast of 6.8%.
"Asia-Pacific has growth potential, and Covestro believes that the region is the fastest growing, so we strategically allocate our research and development budget to this region," Mr Friede said.
Covestro's sales in the first six months of 2018 rose by 7.9% to €7.6 billion (288.6 billion baht), driven principally by higher selling prices across all three segments.
Net income for the period was €1.2 billion, a rise of 31.1%.
Mr Friede said Covestro had an R&D budget of €274 million in 2017, an increase from €259 million budgeted in 2016.
Covestro is committing 80% of its R&D investment budget to meet the United Nations' Sustainable Development Goals by 2025, up from 50% in 2017.
Last year, Covestro's sales grew by 18.8% to €14.1 billion and net profit more than doubled to €2 billion.
Covestro has 30 sites in Europe, Asia and the US, and it employs about 16,200 people across its production sites worldwide.
Chinese foothold
Covestro is expanding its capacity in line with the demands of the market, in particular in China, where it has strengthened its foothold in the country.
The company has spent more than €3 billion in China in recent years.
In the next three years, Covestro's annual capital expenditure will increase further to €1.2 billion. That will allow targeted expansion of capacity through the construction of new facilities worldwide.