Covestro Thailand: Leading innovation and sustainability in the chemical industry

Nisa Suttipornphaisankula

Thailand's chemical industry stands as one of the nation's most vital economic sectors, contributing significantly to GDP and export revenues while serving as a cornerstone of the country's industrial ecosystem. Concentrated primarily in the Eastern Economic Corridor (EEC), and industrial hubs like Map Ta Phut in Rayong province, the industry has evolved from basic petrochemical production to sophisticated specialty chemicals and advanced materials manufacturing. With global supply chains reshaping and sustainability becoming paramount, Thailand's chemical sector faces both unprecedented challenges and remarkable opportunities.

Despite being one of the world’s leading manufacturers of high-tech polymer materials, Covestro is set to navigate geopolitical tensions, rising competition from regional players, and increasing demands for environmentally sustainable solutions.

GTCC interviewed Nisa Suttipornphaisankula, Managing Director of Covestro (Thailand), exploring Covestro's strategic approach to chemical manufacturing, sustainability initiatives, and future growth plans in Thailand and the broader Southeast Asian region. Covestro is also celebrating its 10th anniversary globally this year.

What is the current situation regarding the chemical industry in Thailand and the broader Southeast Asian region? What are the key developments, trends and challenges?

The chemical industry in Thailand and Southeast Asia is currently navigating a complex landscape shaped by economic fluctuations, geopolitical tensions, and evolving policy frameworks. While these challenges are persistent, they present both obstacles and opportunities for companies like ours.

For Covestro specifically, our regional production model has provided some insulation from direct impacts. Our operating principle of "producing regionally for regional markets" means that exports to distant regions like the United States represent a relatively small portion compared to our intra-Asia trade. Consequently, reciprocal tariff measures haven't significantly affected us directly.

However, the indirect effects present more complex challenges. Countries that have lost access to U.S. markets are increasingly turning to ASEAN as an alternative destination, creating an influx of commodity products, particularly from China, into ASEAN countries. This has intensified competitive pressure, especially regarding pricing and market dynamics.

The traditional commodity segment has become increasingly difficult to compete in, particularly against high-quality products entering from China. As a response, the chemical industry is shifting toward higher-value products that leverage innovative technologies and serve specialised markets. This trend is particularly pronounced in the automotive, electric vehicle, healthcare, and construction sectors.

The industry is experiencing a fundamental transformation toward developing more innovative products and identifying new markets to enhance product value while maintaining competitiveness. Sustainability has emerged as a major focus across leading industries, with companies actively seeking alternative raw materials and working to reduce CO₂ emissions. These priorities have become central to the chemical sector's strategic direction.

What makes Covestro different from other players in the chemical industry in Thailand and regionally?

Covestro's differentiation lies in our focus on innovation and high-tech polymer materials rather than commodity products. Our core business centres on advanced polymer materials, and we concentrate on understanding market needs while specialising in developing innovative market solutions rather than simply expanding across various industries indiscriminately.

We maintain our core competency in development with the goal of becoming the best at what we do by providing innovative and sustainable solutions to our customers, particularly in high-end product segments. For instance, in healthcare, not every commodity product can serve specialised medical applications. We work closely with our customers to develop healthcare solutions that leverage the unique benefits of high-tech polymers and contribute to improving human life.

In the automotive sector, we collaborate with customers to develop innovative solutions that go beyond traditional plastic manufacturing. We produce high-tech plastic solutions tailored for advanced applications, focusing on specialised requirements rather than massmarket commodities.

This approach allows us to maintain leadership in specialised markets where technical expertise, innovation, and quality are paramount. Our emphasis on research and development, combined with close customer collaboration, enables us to create solutions that address specific industry challenges rather than competing solely on price in commodity markets.

What are Covestro's end-of-life solutions and how do they contribute to climate neutrality goals?

Our end-of-life solutions represent a comprehensive approach to circular economy principles, focusing on ensuring our innovative materials don't become waste at the end of their useful life. Covestro has developed multiple pathways for taking back end-of-life products for recycling or reuse in production processes.

We've made mechanical recycling readily available, with significant expansion of production capacity. Notably, we have expanded mechanical recycling production capacity in China, which can produce over 25,000 tons yearly. Together with capacity from other sites such as our Map Ta Phut site, we are committed to supplying over 60,000 tons recycled-content polycarbonates annually in the Asia Pacific region by 2026. (reference: Covestro launches mechanical recycling polycarbonate compounding) Beyond mechanical recycling, we've achieved success with chemical recycling through pilot plants and laboratory development. For polyurethane products, we've developed processes to break down polymers into their individual components for reuse in production. This initiative has been successfully launched as a commercial operation in Germany.

For example, we can take used foam from mattresses and extract the polymer materials, which are typically highly bonded together. Through chemical processes, we can separate these materials into their component parts, which can then be reused both as CO₂ and as raw materials in new production cycles.

Regarding logistics and global availability, while our main production follows regional principles, we can supply recycled products globally based on demand. However, we prefer keeping production close to customers to reduce logistics costs and CO₂ emissions. Our facilities across Asia, the United States, and Europe all have capabilities to produce recycled products.

In Thailand, at our Map Ta Phut site, we have production lines capable of manufacturing recycled polycarbonate, which means we don't always need to source recycled materials from Europe. This regional approach supports both sustainability goals and cost efficiency.

How do you view current government incentives and their impact on Thailand's competitive advantages for Covestro and the broader chemical industry?

Covestro has been recognised at the national level in Thailand, and we've been invited to high-level discussions where government leaders, including the former Deputy Prime Minister, seeked input from investors about additional support needed for further investment. This engagement is particularly important as global geopolitical changes may influence investment decisions.

Having operated in Thailand for more than two decades, we've maintained continuous investment in our plants over many years. While individual investments may not be enormous, they've been consistent, typically occurring every three to five years. Our most recent significant investment was completed in 2022, with the successful implementation of a new plant in Thailand as well as further investments on capacity expansions in these two years.

As a foreign company, we recognise substantial benefits in current government incentive schemes, particularly from the Board of Investment (BOI). These benefits include import tax exemptions, advantages on raw material imports, and machinery import benefits, especially since we import equipment to build plants for export production.

We maintain strong alignment with government regulations and have built a reputation for compliance with requirements. This has resulted in excellent collaboration between Covestro and government agencies when addressing additional requests, problems, or issues.

Looking toward future business development, we believe the government should consider improvements beyond import tax reductions. Given industry trends, particularly in chemicals, there's increasing focus on CO₂ emission reduction and carbon footprint management.

Covestro views these initiatives not just as social responsibilities but as essential for future exports to Europe, where carbon taxes are already implemented.

We need government support in understanding carbon taxation and assistance in becoming a low-carbon-foot print company. As a chemical company with energy-intensive operations, accessing green energy represents the most effective way to quickly reduce CO₂ emissions.

However, access to green energy remains limited due to incomplete regulations on third-party access. Government acceleration of regulatory frameworks would enable companies like ours to act decisively. Market players with green energy capabilities exist, and demand from companies like ours is strong, but regulatory gaps prevent direct connections. Government acceleration of green energy regulations would make Thailand more attractive for the next wave of investment in sustainable industrial development.

What are Covestro's plans for adopting AI and new technologies in manufacturing and process optimisation?

AI and digitalisation form core components of Covestro's strategy, rather than trendy additions. As a manufacturing company, we focus on process optimisation, operational excellence, safety, reliability, and quality. In the chemical industry, we operate large machines continuously, making constant human monitoring of every reaction impractical. Digitalisation has been integral to our processes for years.

AI enhances our ability to make information more actionable by providing early warnings about potential issues. We use AI to improve process excellence, predict maintenance needs, and ensure safety standards. AI helps us monitor preventive and predictive maintenance, determining when to stop machines, what to inspect, and what conditions must be met.

With extensive data and monitoring systems, AI helps us handle big data effectively, learning patterns and signaling when action is required. In chemical plants, trial and error isn't viable since errors can be costly, so we test thoroughly in laboratories and smallscale production before scaling up.

AI implementation also affects human resources. Employees need to understand and accept AI as a tool. At Covestro, we developed an internal AI tool called CoVa, which employees can use securely without exposing sensitive company data. While not as advanced as ChatGPT, it's tailored for research and internal purposes.

CoVa operates in multiple languages, including Thai, learning from new data daily and becoming more intelligent and effective for organisational use. This represents part of our investment in production and operational excellence.

CoVa has been successfully implemented and is well-accepted by employees, who recognise that AI handles non-value-added tasks efficiently, freeing them for more complex responsibilities.

Beyond manufacturing, we're implementing AI in supply chain management. We've launched pilot projects for customer service, where AI handles routine inquiries that previously required call centre staff. Instead of human operators answering repetitive questions about shipments, invoices, and basic information, AI provides these services, allowing customer service representatives to focus on sophisticated inquiries.

What are the main challenges and opportunities for female professionals in the chemical industry?

Working in the chemical industry presents inherent challenges due to the nature of the work, and being female in this industry adds additional considerations, especially in operational areas where men traditionally dominate. As women, we often need to invest extra effort in developing leadership skills, technical capabilities, and adapting to infrastructure that may not have been originally designed with women in mind. Simple considerations, like appropriate restroom facilities or changing rooms for operators, may not have been initially planned with female workers in mind.

However, positive trends are emerging at Covestro. We're seeing increasing numbers of female operators applying for positions and being selected as candidates. This indicates that historical barriers may be breaking down as women demonstrate willingness to accept challenges and enter positions traditionally held by men. This development encourages greater female representation not only in leadership roles but also in frontline operational positions. It demonstrates to organisations and communities that instead of judging women based on stereotypes, it's more productive to evaluate competencies, capabilities, and listen to perspectives from different angles.

Embracing diversity and supporting inclusivity can improve decision-making processes by incorporating detailed perspectives that women often bring, potentially leading to better organisational outcomes. This represents an opportunity to transform stereotypes and judgments into improvements in decision-making processes.

Regarding supportive policies, the chemical industry naturally employs more males than females, particularly in frontline shift work. Women who accept these roles must often balance additional responsibilities as mothers, wives, or caregivers, roles that women typically handle more than men.

While trends are improving, dramatic changes to gender balance may not occur rapidly. However, Covestro implements thoughtful infrastructure planning, ensuring facilities include appropriate amenities for both male and female employees, even when no female employees are currently present.

We've also launched a global Diversity, Equity, and Inclusion (DE&I) programme that extends beyond gender considerations to encompass how we work together. Diversity includes listening to others equally, being open to feedback, and creating inclusive environments. Rather than focusing solely on male-female dynamics, we emphasise diversity, inclusion, and equity in broader contexts, recognising the importance of LGBTQIA+ inclusion in contemporary workplace discussions.

Our approach focuses on creating environments where all employees can contribute effectively regardless of background, fostering collaboration that leverages diverse perspectives for improved organisational performance and innovation in the chemical industry.

Interviewed by Chadaphan Maliphan and Chatchanok Hangason, GTCC Team

Nisa Suttipornphaisankula

Managing Director

Covestro (Thailand)

Contact details:

Khawissara Wattanapisit

Covestro (Thailand) Co., Ltd.

Head of Communications - ASEAN

Tel: +66 2 029 9012

Khawissara.wattanapisit@covestro.com

https://www.covestro.com/en/company/covestro-worldwide/asean