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Abstract:
Commitment to sustainable solutions for effects of global megatrends
Products, processes and applications for today and tomorrow

'From Megatrends to Business' - K 2010 preview

Leverkusen | Posted on June 11th, 2010

Bayer MaterialScience is committed to help meet the global challenges of energy shortages and climate change through innovative and sustainable technologies and processes. This is the company's central message at K 2010, the international trade show for the plastics and rubber industry, which is being held in Düsseldorf from October 27 to November 3. The company aims to be a prominent part of the solution in tackling the effects of global megatrends such as the growing population and increasing urbanization.

Patrick Thomas, Chief Executive Officer, Bayer MaterialScience, said: "This company cannot solve these problems by itself, of course, but it does have sustainable solutions in the form of innovative products, processes and applications that exist today or are being developed for tomorrow."

Thomas was speaking to journalists in Leverkusen to outline Bayer MaterialScience's plans for its presence at K 2010. Under the motto 'From Megatrends to Business', the company will showcase its leadership in polymer materials and its focus on sustainable solutions and developments in the areas of climate, technology, mobility, living and health on a 1,000-square-meter stand in Hall 6.

Starting with an overview of Bayer MaterialScience's current business performance, Thomas explained: "Our high-tech materials business had a successful start to 2010 and we are confident of future development." Sales in the first quarter of 2010 were up by 36 percent, to EUR 2.22 billion (Q1 2009: 1.64 billion) from the very weak prior-year quarter, which was greatly hampered by the economic and financial crisis. Business also gained 9.9 percent over the fourth quarter of 2009 with all business units contributing to this significant improvement with higher volumes and selling price increases. The earnings before interest, taxes, depreciation and amortization (EBITDA) before special items of Bayer MaterialScience improved markedly to EUR 287 million, against a loss of EUR 116 million in the prior-year quarter.

Confirming the forecast for the current year, Thomas said that MaterialScience anticipates a continuing recovery in the markets relevant to its business. In light of this, the subgroup is targeting a sales increase in the region of 20 percent on a currency- and portfolio-adjusted basis in 2010. MaterialScience plans to more than double EBITDA before special items. In the second quarter of 2010, the Bayer subgroup anticipates further growth in sales and an improvement in EBITDA before special items compared with the first quarter of the year.

Thomas's confidence in the subgroup's future economic development was underpinned by the fact that Bayer MaterialScience offered sustainable solutions to the effects of global megatrends. "We live in a dynamic world that faces many challenges, and at Bayer MaterialScience we must ask ourselves what opportunities and risks lie ahead. Global shifts such as societal demographics, climate change and energy shortages are driving our search for sustainable solutions that can help meet future needs," said Thomas.

He went on to say that in 2030 more than eight billion people will live on the Earth, five billion of them in cities. "Today, buildings are responsible for about 30 percent of global greenhouse gas emissions and more than 40 percent of global energy use. So the need for renewable forms of energy is clear," said Thomas. Retrofitting materials to combat climate change has significant benefits, and if buildings were retrofitted with polyurethane insulation - by far the most effective insulating material per unit weight - then real reductions in carbon dioxide emissions could be achieved.

Thomas said that over 14 percent of all greenhouse gases worldwide came from the transportation sector, which meant it was 'number three' as an emission source. "Lightweight composites can cut a vehicle's weight by up to 30 percent, resulting in a significant reduction in fuel consumption," he said.

"We are already supplying polyurethane composites as replacements for the metal roofs of cars, and we are beginning to supply polycarbonate glazing components as a substitute for glass. Replacing very energy-intensive steel and glass components in vehicles with polymers - which are much less energy-intensive and require much less energy to manufacture, and also reduce the weight of the vehicle - offers significant reduction potential."

Giving further examples, he said traditional light bulbs have a light efficiency of 3 percent compared with up to 80 percent for LEDs (light emitting diodes), and although there were challenges in manufacturing LEDs and managing their light, polycarbonate resin is one of the few materials that can withstand their high temperatures.

Materials from Bayer MaterialScience also play an important role in the cool chain: Up to 50 percent of food is wasted between the time it is produced and the time it is consumed. "Refrigerated transportation and cold storage are hugely important, and polyurethane insulation materials play a key role here," he said.

Innovative products from Bayer MaterialScience are also set to become integral components of wind turbines, where the adhesives used to bond the blades are increasingly polyurethane-based instead of epoxy. Nanotubes can also be incorporated into the epoxy resins to reduce the weight of the blades.

"Our materials have the potential to bring about a major improvement in the energy efficiency of every sector of the economy. The stories of the future we will be telling at K 2010 will show that Bayer MaterialScience has the necessary expertise in technology and materials to work with customers and support them in their new developments. At the same time we are a reliable, innovative partner when it comes to finding solutions that alleviate the effects of global megatrends," said Thomas.

Forward-Looking Statements
This release may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer's public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

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About Bayer MaterialScience
With 2009 sales of EUR 7.5 billion, Bayer MaterialScience is among the world’s largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, electrical and electronics, construction and the sports and leisure industries. At the end of 2009, Bayer MaterialScience had 30 production sites and employed approximately 14,300 people around the globe. Bayer MaterialScience is a Bayer Group company.

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