High praise for the company’s success
Asked about the future structure of Bayer’s portfolio, Wenning emphasized that “each of the three subgroups – HealthCare, CropScience and MaterialScience – forms an integral part of the Bayer Group.”
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| At the Bayer Schering Pharma exhibition, Ludwig Hahn handed out information brochures to Christina Kersten, Jan Schell, Juliane Pütz and Brigitte Nassauer (from left). |
He pointed out that Bayer MaterialScience operates in a cyclical environment and that rising raw material costs and the creation of additional production capacities are temporarily squeezing margins. In the Bayer Chairman’s words, however, the tremendous growth potential of this subgroup’s products is of greater significance: “We haven’t reached the peak there yet,” said Wenning, adding that this applies both to polycarbonates and the polyurethane raw material MDI. “That’s why we’re confident that Bayer MaterialScience will earn its capital costs in difficult times as well.”
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| The Bayer Cross and the company colors featured prominently in the light and transparent atmosphere of the Cologne Exhibition Center’s entrance hall. |
The Bayer CEO also expressed optimism in response to a question about the performance of the crop protection business at Bayer CropScience, remarking that an improvement in the global crop protection market is expected in 2007. According to Wenning, the main reason for this optimism is that prices for crops such as corn, canola, soybeans and cereals have risen significantly, partly because of poor harvests in the previous year due to weather conditions and partly on account of strong demand for raw materials used to produce biofuels. He said these factors will likely cause farmers to spend more on fertilizers and crop protection products. In addition, Bayer CropScience is working to improve its cost structures and expand its research and development activities in the rapidly growing seed business. Said Wenning: “We are working hard on ways to make plants more resistant to stress factors such as dryness, heat, cold or soil with a high salt content that will tend to come to the fore in the event of significant climate changes.”
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| Tomorrow’s medicine: Christina Sehnert (left) explained to visitors Wilhelm Winter and Konstanze Loose how cardiovascular medicines work. |
One stockholder asked about the importance of research and development in relation to Bayer’s corporate strategy. “Innovation is the only way to ensure sustained success for our company,” Wenning explained. He said the research budget will grow to approximately €2.8 billion this year following the integration of Schering, making it the largest budget of any chemical or pharmaceutical company in Germany. “It’s investment on this scale that enables Bayer to submit three new patent applications every working day. We achieved sales of more than €4 billion last year with recently launched products and new applications.” Wenning also spoke about the overall climate for innovation in Germany: “We must recognize the opportunities that new technologies present for our country’s future. Unfortunately, our initial focus on the possible risks of each new technology, rather than the opportunities it presents, often detracts from seizing those opportunities.”
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