Bayer on the upswing, thanks to PU

By David Reed, UT EditorLeverkusen, Germany – Bayer MaterialScience, the subgroup of Bayer AG responsible for its polyurethanes, polycarbonate and other businesses, reported a 21-percent jump in sales, to Euro 8600 million ($11 500 million) in 2004. The firm also reported that it was “sold out” of MDI (methylene diphenyl diisocyanate) and polycarbonate. Propylene oxide, key precursor to polyether polyols for polyurethanes, was also in short supply, the firm indicated.As a result of price increases and other measures, including a Euro 200-million contribution from internal cost-saving measures, EBIT of the BMS unit almost doubled in 2004, to Euro 668 million, the firm reported at its annual financial press conference, 15 March in Leverkusen.Elswhere in the portfolio, things were less exciting. In particular, the firm described its business in TDI (toluene diisocyanate) as having “over-capacity” which it expects “to grow into.” The TPU (thermoplastic polyurethanes) business, also part of the BMS unit, only saw an 8-percent increase in sales over the year, and its coatings, adhesives and sealants operations also saw a modest 7-percent gain in sales in 2004.And the firm said firmly that, despite being able to pass on much of the Euro440 million increase in its raw material costs in the last year, this did “not fully offset last year’s increases,” and that this year it hoped “to pass more [costs] on.”Total sales for the whole Bayer enterprise, including its Crop Protection and HealthCare sub-groups, reached Euro 29 758 million, up just 4.2 percent on 2003, thanks to strong growth in Latin America/Africa/Middle East (up 18 percent to Euro 3600 million)) and China (up 30 percent). China’s growth boosted total sales in Asia-Pacific to Euro 4900 million, up 14.3 percent on 2003, Bayer reported.Sales growth in Europe, at 6 percent to Euro 12 900 million, was mainly driven by improved sales in eastern and central Europe; sales in Germany only rose 1 percent, Bayer reported.Business in North America increased by 4 percent to Euro 8300 million.”