* Plastics chief seeks to boost growth at smallest unit

* May want to acquire technology

* Any IPO proceeds likely to be used to cut debt (Adds CEO comments, background)

LEVERKUSEN, Germany, June 19 (Reuters) – The plastics division of German drugmaker Bayer, which is to become a separately listed company by mid-2016, will seek to boost growth mainly at its coatings business, the smallest of its three units.

"We've actively managed our portfolio in coatings over the years. That is something we continue to do," said Patrick Thomas, the head of Bayer MaterialScience, which is to be renamed "Covestro".

"Maybe there's a piece of technology we want to acquire to add on to that business. We'd love it to be bigger," he told journalists at a media briefing late on Thursday.

Bayer MaterialScience is strong in water-based, odour-free coatings to replace solvent-based products and could seek to build on that strength, he added.

Sales at the Coatings, Adhesives, Specialties business unit rose a currency-adjusted 5.5 percent to 1.9 billion euros ($2.2 billion) in 2014, accounting for about 16 percent of Bayer MaterialScience's sales.

The division of Bayer is mainly known for being the largest maker of transparent plastics called polycarbonates used in panoramic car roofs, roadside noise barriers and blu-ray disks.

It is also the industry leader in chemicals for polyurethane foams, used for insulation and for padding in mattresses, furniture, car seats and running-shoe soles.

Buying other polycarbonates or polyurethane businesses would easily run in to opposition from anti-trust regulators, Thomas said.

Parent Bayer has said the plastics division will become a separately listed company by mid-2016 at the latest and Bayer will decide in the second half of 2015 whether there will be an initial public offering (IPO) or a transfer of the subsidiary to its shareholders in a cash-free spin-off.

Bayer has hired Rothschild, Morgan Stanley and Deutsche Bank to manage the transaction and is in the process of selecting more banks, people familiar with the matter have said.

Thomas said any capital increase at Covestro as part of an IPO would likely be used to reduce the debt shifted from the parent to Covestro, and fresh cash would not justify boosting expenses on plants and equipment.

http://www.reuters.com/article/2015/06/19/bayer-plastics-idUSL5N0Z511P20150619