Covestro AG, the German manufacturer of polymers and high-performance plastics, is increasing its investment in China as part of its strategy to strengthen local production, innovation and market responsiveness, with thermoplastic polyurethane (TPU) identified as a key growth segment amid strong demand across Asia, said senior executives.

The Leverkusen, Germany-headquartered group began operations at its new TPU manufacturing facility in Zhuhai, South China's Guangdong province, last week. The facility, backed by a multi-phase expansion plan, is expected to evolve into Covestro's largest TPU production base worldwide, with potential for future exports.

TPU is a highly versatile material used across various industries, including footwear, consumer electronics, functional films, and seating and cushioning systems in automotives.

Monique Buch, chief commercial officer of Covestro, emphasized that Guangdong's well-established electronics and footwear industries are major end markets for TPU, with fast-growing sectors such as the low-altitude economy, drones and flying vehicles generating new demand for advanced materials.

"Covestro will also produce more recyclable TPU at the Zhuhai site, with at least 25 percent of the input materials coming from bio-based or recycled sources, in line with its circular economy strategy and China's dual carbon goals," she said.

The first phase of the Zhuhai facility will produce 30,000 metric tons of TPU annually, meeting growing demand for this versatile material across industries such as information technology, automotive and footwear.

The Zhuhai site will be developed in three phases across a 45,000-square-meter area, with maximum production capacity estimated to reach 120,000 tons per year upon completion of the final phase, expected in the 2030s, making it Covestro's largest TPU production facility globally.

Highlighting China's vast, high-quality and steadily growing market, Buch said the country's strong emphasis on sustainability aligns closely with the company's corporate philosophy.

"More importantly, the speed of market development and the ability to scale in China are rare globally, which is why we believe it is essential to stay close to customers and remain deeply rooted in the Chinese market," she added.

As the Chinese market accounts for more than 20 percent of Covestro's global sales, the German company has invested more than 4 billion euros ($4.73 billion) in the country since 2001, and plans to continue its close collaboration with its partners in China.

Against this backdrop, Andrea Maier-Richter, head of TPU at Covestro, said the group has established an integrated regional setup in China that brings together production, fundamental research and customer-focused application development.

She said the integrated approach positions Covestro well to drive innovation and deliver tailored solutions that meet the specific needs of diverse industries in South China, ranging from footwear to automotive and consumer electronics.

With 3,300 employees in China, Covestro currently operates 10 production sites and several innovation centers in the country.