BAYER
Plastics "major contributor" to 1994 earnings rebound / Expansion in polycarbonate
Plastics were the "major contributor" to the Bayer (D-51368 Leverkusen) group's earnings turnaround in 1994, Chairman Dr Manfred Schneider said at the spring financial press conference. "Buoyant demand from customers in the automotive and electrical industries" as well as "significant price increases" paved the way for the unexpected development.
Bayer's Polymers division, including rubber and manmade fibres as well as engineering plastics, rebounded from a 1993 loss of DM 115m to post an operating profit of DM 266m. Turnover rose 10% to DM 7.5bn, giving the division a return on sales of 4%. Within the total, plastics sales rose 15% to DM 2.6bn and turnover of subsidiary Wolff Walsrode (D-29655 Walsrode) improved by 8% to DM 729m.
Subsidiary EC Erdölchemie (PO Box 752002, D-50754 Köln), the 50:50 joint venture with BP (part of Bayer's Organics division), benefited from the "worldwide upswing in the petrochemical industry" and returned to profit after three years of losses. EC's sales upturn of 9% to DM 661m was due partly to higher prices, as volumes picked up by only 6%. Earnings before transfer to the jv partners totalled DM 77m. Polyurethanes, part of the Industrial Products division, profited from higher demand in the construction and automobile industries. Divisional turnover increased 10% to DM 3.2bn and "substantial gains" were made on the volume side.
Bayer's commitment to plastics and rubber is being underscored by investment in new capacities outside Europe. Polycarbonate (PC) output will be expanded through .a soon to be finalised 18,000 t/y production jv in China, with partner Shanghai Chlor-Alkali Co, in which Bayer could hold as much as 90%. Startup has been pencilled in for 1997. A Chinese rubber chemicals jv is also on the horizon.
In the US, debottlenecking of PC production at Baytown, Texas, began last year. When finished in 1996, this will add 20% to the current 80,000 t/y ouput, according to deputy chairman Hermann Wunderlich. Plans also are afoot to expand capacities for polyurethane chemicals. An Asian site is still being sought for TDI feedstock production, but sources believe it will not be built in Taiwan, as often speculated. US capacities for MDI are being doubled to 180,000 t/y. In another development of interest to the plastics industry, Schneider hinted that his group may be close to winning a contract from Mercedes to supply parts for the "Swatchmobile" mini car.
Bayer's balance sheet – compiled for the first time according to International Accounting Standards – shows group net earnings up 47% to DM 2bn, with sales up 6% to DM 43.4bn. The volume sales upturn of 8% was the "largest in many years," said Schneider. Selling prices fell 2%. The Bayer chief said prices must rise by "at least that much" in 1995. A 15% rise in pretax profits to DM 3.8bn is projected for this year, barring further foreign exchange aberrations, along with a 5% sales increase to DM 46bn.
READER SERVICE: Spring financial press conference, speeches by Schneider and finance chairman Helmut Loehr (English): PIE-No. 37458 – Bayer annual report 1994 (English): PIE-No. 37459 – Financial Statement with graphs of key data (English): PIE-No. 37460.
Bayer's Polymers division, including rubber and manmade fibres as well as engineering plastics, rebounded from a 1993 loss of DM 115m to post an operating profit of DM 266m. Turnover rose 10% to DM 7.5bn, giving the division a return on sales of 4%. Within the total, plastics sales rose 15% to DM 2.6bn and turnover of subsidiary Wolff Walsrode (D-29655 Walsrode) improved by 8% to DM 729m.
Subsidiary EC Erdölchemie (PO Box 752002, D-50754 Köln), the 50:50 joint venture with BP (part of Bayer's Organics division), benefited from the "worldwide upswing in the petrochemical industry" and returned to profit after three years of losses. EC's sales upturn of 9% to DM 661m was due partly to higher prices, as volumes picked up by only 6%. Earnings before transfer to the jv partners totalled DM 77m. Polyurethanes, part of the Industrial Products division, profited from higher demand in the construction and automobile industries. Divisional turnover increased 10% to DM 3.2bn and "substantial gains" were made on the volume side.
Bayer's commitment to plastics and rubber is being underscored by investment in new capacities outside Europe. Polycarbonate (PC) output will be expanded through .a soon to be finalised 18,000 t/y production jv in China, with partner Shanghai Chlor-Alkali Co, in which Bayer could hold as much as 90%. Startup has been pencilled in for 1997. A Chinese rubber chemicals jv is also on the horizon.
In the US, debottlenecking of PC production at Baytown, Texas, began last year. When finished in 1996, this will add 20% to the current 80,000 t/y ouput, according to deputy chairman Hermann Wunderlich. Plans also are afoot to expand capacities for polyurethane chemicals. An Asian site is still being sought for TDI feedstock production, but sources believe it will not be built in Taiwan, as often speculated. US capacities for MDI are being doubled to 180,000 t/y. In another development of interest to the plastics industry, Schneider hinted that his group may be close to winning a contract from Mercedes to supply parts for the "Swatchmobile" mini car.
Bayer's balance sheet – compiled for the first time according to International Accounting Standards – shows group net earnings up 47% to DM 2bn, with sales up 6% to DM 43.4bn. The volume sales upturn of 8% was the "largest in many years," said Schneider. Selling prices fell 2%. The Bayer chief said prices must rise by "at least that much" in 1995. A 15% rise in pretax profits to DM 3.8bn is projected for this year, barring further foreign exchange aberrations, along with a 5% sales increase to DM 46bn.
READER SERVICE: Spring financial press conference, speeches by Schneider and finance chairman Helmut Loehr (English): PIE-No. 37458 – Bayer annual report 1994 (English): PIE-No. 37459 – Financial Statement with graphs of key data (English): PIE-No. 37460.
31.03.1995 Plasteurope.com [20854]
Published on 31.03.1995