Bayer Plans Dm1.5bn Asian Investments

Bayer management board chairman Manfred Schneider told a news conference the group will focus largely on expanding its polymers business.

In Thailand, Bayer acquired a company producing ABS plastics and plans to build a plant to produce Makrolon polycarbonate which is scheduled to come on stream in 1999.

Similarly Schneider said the group was taking a stake in a plastics group in India and had already embarked on capital expenditure programmes in Indonesia and Singapore and joint-ventures in China.

In the first nine months of 1996, the Asia/Africa/Australia region posted a 1.2 per cent increase in sales totalling DM 4.2 billion. The group posted total sales of DM 36.54 billion in the same time.He expected construction-related demand for extruded aluminium products would be strong in the heavily populated corridor extending up the Yangtze River from Shanghai. He also stressed the importance of finding good partners in China.

 

I think we have in both instances, the one (venture) in Shanghai and the other one in Kunming, been fortunate enough to have very good partners, he said. Were sharing the risk a bit.

He added that education and training would be a major part of the companys role in its Chinese ventures. We will take the employees from the extrusion plants that well be operating, take them to the US, give them full training and bring them back, he said.

Born said emerging market infrastructure projects were one of four pillars of the companys strategy for the future, along with low-cost production of aluminium ingot, niche markets and transportation. Meanwhile, Bayer AG on Tuesday said acquisitions helped boost its nine month results, leaving the chemicals and drugs group confident of reaching its 1996 sales target of DM 47 billion ($31.06 billion) and posting a 10 per cent rise in operating earnings.

Bayer reported a 12 per cent rise in nine-month pre-tax profits to DM 3.7 billion while sales rose 7.4 per cent to DM 36.54 billion, broadly in line with forecasts. Third quarter pre-tax profits climbed 8.3 per cent to DM 981 million with sales also rising 8.3 per cent to DM 11.747 billion. The company said it was not planning to spin off its drugs unit into a separate legal entity in the medium-term but will continue to look to form joint ventures.

While Bayer discussed the option and Schneider said such a step could not be ruled out forever, the group said it will fare better by sticking with its current business structure.