Bayer’s new strategy for growth unveiled
Bayer’s continuing drive to focus on specialty chemicals - including those involved in the processing of leather - shifted up a gear earlier this week when the company unveiled plans for a new operational structure.
Under the plan, the German pharmaceuticals and chemicals hybrid will transform itself into a management holding company with four legally independent corporate units. According to Management Board Chairman Dr. Manfred Schneider, the revised structure will give the company the increased flexibility it needs to form strategic partnerships, without affecting it established ‘four pillar’ strategy. The move is in marked contrast to other chemicals conglomerates such as Rhône-Poulenc, Ciba and Hoechst, which have spun off their pharmaceutical, speciality and commodity activities into more focused units in recent years.
The new separate Bayer units are Polymers, Chemicals, Health Care and Crop Science, with the company’s Basic and Fine Chemicals and Specialty Products business groups being merged to form the new Chemicals unit. With some Eur4 billion in sales and a targeted return of 12% to 13%, the new Chemicals unit will be one of the world's leading specialty chemicals producers.
"A major factor in this decision – apart from the obvious synergies in manufacturing, logistics and management – was the need to plan for a strategic partnership," commented Schneider. The increasingly difficult conditions in the world market for chemicals – especially specialties, fine chemicals and life science intermediates – are leading to industry consolidation, he said.
However, the Chairman was also keen to stress that Bayer will not become a financial holding company. "Let me make it quite clear that we are not opting for a financial holding structure. There will continue to be structural ties between the operating companies," declared Schneider. Subject to stockholders' approval, the new structure will become operationally effective January 1, 2003. Plans to this effect were approved by the company's Supervisory Board at its meeting on December 6, 2001.
