12 Asian PU Digest – VOL. 1, NO. 1

Asian PU Digest:Can you please provide our readers with a short CV and description of your current role within Covestro?

Andrea Maier-Richter:I graduated in chemical engineering and fin-ished my studies with a PhD in chemistry from University of Duisburg-Essen. I started my professional career as project engineer for Semiconductor Material & Process Re-search at Siemens AG, Erlangen, and sup-ported as Consultant the set-up of a new university course for chemical engineering at Singapore University in Singapore. In 1999, I joined Bayer as project manager at their Cen-tral Technology Development Department in Leverkusen. Since then, I worked in various senior technical and managerial roles in Busi-ness Development, Corporate Strategic Plan-ning, Global Product Innovation, Marketing and Sales Polyurethanes, where I returned to Asia Pacific to work at our regional headquar-ters in Hong Kong in 2011. Prior to my cur-rent role as Head of Commercial Operations Asia Pacific, I headed the Global Industrial Marketing for Building & Construction. I am married and have two children – my family lives with me in Hong Kong.

Asian PU Digest:You were involved in different roles including strategy, marketing, and innovation. What are the most important experiences you bring to your new role?

Andrea Maier-Richter:Through my previous leadership roles in strategy, innovation and operations, I gained experience in various functions that signifi-cantly contribute to make a business suc-cessful. Throughout my tenure at Covestro, I found that three things contribute greatly to creating results: a cross-functional, cross regional team approach with close collabo-ration, an open and constructive communi-cation and feedback culture, and a common, committed goal to make things happen. Asia Pacific is a dynamic and challenging market.

With my previous experiences I will drive to create more synergies and opportunities for a greater impact and contribute together with my team to the on-going success of Covestro in the region.

Asian PU Digest:Covestro is an independent company now for about half a year. What has changed since being split off from the Bayer Group (internally for your employees and externally for your customers)?

Andrea Maier-Richter:The separation enables us to deploy our ex-isting strengths even more rapidly, effective-ly and flexibly in the global competitive are-na. We see our autonomy as a way in which we can align our organizational and process structures as well as our corporate culture entirely towards a unique industrial environ-ment and business model.

At Covestro, we aim to work together “to make the world a brighter place”. In addition to developing products that benefit society, we work on materials, solutions and technol-ogies that help reduce our impact on the environment. One of our major strengths is the close dialogue we have with customers, and this has not changed even as we are now Covestro. This allows us to recognize early on what our customers and ultimately consumers really need.

Asian PU Digest:Did anything change regarding your culture, your strategy or your business model?

Andrea Maier-Richter:The company’s vision “to make the world a brighter place” serves to guide our employ-ees in their day-to-day collaboration. The vi-sion is closely tied to Covestro’s three cor-porate values: curious, courageous and colorful.

Curious: We are proud of our past but are not defined by it. Our curiosity drives us to

Interview with Andrea Maier-Richter,

Head of Commercial Operations Asia Pacific, Covestro

In her current role as Head of Commercial Operations Asia Pacific of Covestro, Andrea Maier-Richter is very glad to be back in the region – it is already her third time working in Asia Pacific. Asian PU Digest had the chance to talk with her about her approach doing the business in the region, the Asean market situation in general, and Covestro being an independent company now.

“ Sustainability, innovation, and customer focus

are core to our actions along the entire value add-

ed chain, in APAC and around the world. ”

13Asian PU Digest – VOL. 1, NO. 1

listen to our customers and respond with creative and unexpected solutions.

Courageous: Our courage permeates our entire business, from partnerships to busi-ness models. We stand on a foundation of knowledge and experience that allows us to act on our courage and push the boundaries of innovation.

Colorful: We value different viewpoints and diverse ideas. The company is optimistic and resourceful, striving to create solutions and solve problems in innovative ways.

Sustainability, innovation, and customer fo-cus are core to our actions along the entire value added chain, in APAC and around the world.

We underscored our commitment to sustain-ability in 2015 by joining the UN Global Com-pact – a United Nations initiative for compa-nies which voluntarily undertake to imple-ment sustainable and responsible business practices. For us, this includes finding alter-natives to the petrochemical derivatives we use and optimizing our production processes to reduce both CO2 emissions and energy consumption.

We also strongly rely on innovations to en-able us to sustain our position. We employ around 1,000 people in our major innovation centers in Germany, the United States and China. As well as developing new products and applications, they also focus on cost-saving and sustainable process technol-ogies.

Asian PU Digest:Let’s now go to our main topic APAC. How do you assess the Asian market?

Andrea Maier-Richter:Overall, a slight recovery is forecast for the emerging economies for 2016. In light of industry overcapacities and a high level of indebtedness, China is likely to post slower growth. However, we are prepared for it and it is not only affecting us but others as well.

We expect slightly stronger development in India. Raw material prices are likely to bot-tom out and support growth in the other emerging economies.

We expect automotive industry growth to return to a normal level of 3 – 4 % in 2016, with Asia and North America probably re-maining the drivers of this growth. The glob-al construction industry is likely to post slight growth in 2016. We expect continued recov-ery in Asia, excluding China, thanks to a sta-ble investment climate. In China, we antici-pate a slight improvement in the construc-tion sector in 2016. We expect the global electrical/electronics industry to post stron-ger growth in 2016 on the back of product innovation. Asia will remain the primary growth driver in the consumer electronics and household appliance segments, with In-dia and the countries of Southeast Asia like-ly to become the principal contributors to growth. Development of the Asian furniture market will probably be slightly weaker, with demand in China in particular impacted by slower economic growth.

For China, 2016 is the first year of the 13th Five Year Plan, which is also an important year for Covestro. Based on the information from the “Government Work Report”, we are delighted that Covestro provides many solu-tions to the industries that are in the focus of the governmental agenda. For example, Premier Li Keqiang reported the focus on the treatment of haze, referring to increas-ing the proportion of clean energy. In 2016, wind power installation is planned to achieve beyond 250 million kW. We have developed polyurethane resins for wind blade production for several years. Break-ing through the limit of the incumbent mate-rial epoxy, the polyurethane combination with glass fibers makes longer and lighter blades possible. Also, the production effi-ciency at wind blade manufacturers will be increased. The report also mentioned to encourage the utilization of straw resource, aiming to increase straw resource utilization ratio up to 85 % by 2020. Particle boards using straw as material and polyurethane as binder are environmentally friendly and formaldehyde-free.

Asian PU Digest:What are the most important markets for the PU business in APAC to Covestro (countries, applications etc.)?

Andrea Maier-Richter:The business growth areas for PU are appli-ances, construction, automotive and renew-able energy.

Appliance: Recently, the household applianc-es industry has implemented more stringent energy efficiency standards. Covestro con-tinuously develops new PU formulations with lower k-value and better insulation so as to improve insulation property of refrigerators and lower the energy consumption.

Construction: With increasing urbanization in China, India and ASEAN countries, build-ings represent one of the sectors with the highest energy consumption. In most areas in the country 65 % energy saving policy has been realized, while some area in the North even promote 75 % energy saving standards. As one of the most suitable in-sulation materials, rigid polyurethane foam saves around 70 times more energy during its service life than is required for its pro-duction. Meanwhile, we are also promoting a polyurethane window frame, which has an excellent insulation property, sound in-sulation and improves the overall property of windows. All these solutions contribute to reducing energy consumption in build-ings.

Automotive: One of the trends of automo-tive industry is lightweight vehicles. Coves-tro has many solutions for light weight and lower oil consumption. For example, we have the Baypreg composite for loading floor, particle board and sunshade, which is 50 % lighter than current materials, pro-vides lower VOC emission and higher pro-duction efficiency.

New energy: As I mentioned before, the 13th Five Year Plan emphasizes the development of renewable energy. Considering it as a promising industry, Covestro will continuous-ly research and promote the use of polyure-

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thane for wind blades, which will be one of our future business growth areas.

Asian PU Digest:Japanese production of PU continues to de-cline, flexible foam as well as rigid foam. How do you explain the difficult situation, Japan is facing during the last years?

Andrea Maier-Richter:There were some challenges in the PU mar-ket in Japanese economy and severe natu-ral disasters, e.g. the earthquake and tsu-nami in 2011 have impacted the domestic market heavily. However, we see the mar-ket is recovering. In Japan, energy saving is on top priority of local government after the earthquake in 2011. It represents good opportunities for our innovative solutions like polyurethanes building insulation. An-other growth driver remains the automotive industry in Japan but even more the Japa-nese automotive transplant business in APAC.

Asian PU Digest:On the contrary, the PU industry in India is experiencing strong growth and saw recent investments in capacities. Which role do you expect India to play in the future?

Andrea Maier-Richter:Indian PU industry has a very close and direct linkage with GDP growth. The eco-nomic reforms pursued by the new govern-ment which focused on labour reforms, tax structures, infrastructure, investments and banking, will significantly impact the PU end-user industry by reducing costs and increasing access to markets. Gestation period of these reforms will be 3 – 5 years. However, early indicators like manufactur-ing output or “Purchasing Manager’s Index (PMI)” are pointing towards a northward trend and Indian GDP 2015 is projected to be in the range of 7.0 – 7.4 %, accelerating even more in 2016 to 7.5 %. Hence re-forms push has helped in sustaining PU demand growth trajectory in India especial-

ly across automotive and construction in-dustry.

Asian PU Digest:Increasing demands for cleaner air and wa-ter, lower CO2 emissions, low VOC products etc. offer opportunities for PU. On the other hand the introduction of new regulations in many of the PU end-use markets, e.g. new fire resistance standards for building prod-ucts or new VOC limits for automotive air cabin quality are challenging the PU industry. How do you assess the situation?

Andrea Maier-Richter:We see these as opportunities rather than challenges. It allows us to act on our cour-age and push the boundaries of innovation. Sustainable, economic and energy-efficient construction has significant potential in Chi-na, but further training and education of cur-rent as well as future industry professionals is needed to grow interest in the field and further improve the understanding of this emerging market.

Covestro offers academic lectures and seminars to students and industry profes-sionals through the Covestro-Tongji Eco- Construction & Material Academy. Valuing theory and practice, the Academy has of-fered practical training to over 2,000 profes-sionals and participants from the building and construction sectors in the field of qual-ity, safety and product application, with par-ticular emphasis on SPF. It has sponsored

over 20 research projects, a notable exam-ple being the academy’s support to develop the Green Campus Building Code, now Chi-na’s national standard for all primary and secondary schools.

Asian PU Digest:In contrast to many raw material manufactur-ers, no further expansions are planned for the immediate future by Covestro. This means that you probably will lose some mar-ket share. Can you comment on this?

Andrea Maier-Richter:Covestro is well invested and so we don’t need a huge capital program over the next five years. For instance, we have invested by now EUR 2.5 billion on our integrated site Shanghai. We have got a good market posi-tion, we have got the momentum, the people and a world-class asset base that we can grow into.

Asian PU Digest:The PU industry typically knows customers that buy raw materials to develop their own formulations, and others that need pre-for-mulated systems. How is the situation in APAC regarding Covestro’s raw materials versus systems business?

Andrea Maier-Richter:We see a transformation of markets happen-ing, not only in APAC but worldwide. Howev-er, systems business is an important ele-ment in our strategy. The systems house network enables us to tap into growth re-gions and applications securing our channel- and speed-to-market, so as to maintain a close proximity to our customers and speak their language.

Asian PU Digest:Andrea, at this point I would like to thank you for the interview and wish you all success for the future.