31 July 2012 12:03 [Source: ICIS news]
LONDON (ICIS)--Sales in Bayer’s MaterialScience business increased by 6.5% year on year in the second quarter of 2012 to €2.96bn, driven by strong results from the subgroup’s Polyurethanes unit, the Germany-based chemical producer said on Tuesday.
MaterialScience’s overall sales growth was also the result of slightly higher selling prices and volumes, Bayer added.
Second-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) before special items from MaterialScience increased by 3.5% year on year to €385m ($470m), "largely as a result of higher selling prices, savings generated by efficiency improvement programs and positive currency effects". However, Bayer added that higher raw material costs did have a negative impact on earnings during the period.
The subgroup’s Polyurethanes business saw sales rise by 12.6% to €1.55bn compared with the same period the year before, the company said.
This sales growth was attributed to higher selling prices in nearly all regions and an increase in volumes in Asia Pacific, Latin America, Africa and the ?xml:namespace>
Bayer reported a rise in sales in emerging markets had also made an above-average contribution to overall sales growth. The emerging markets accounted for 42.7% of MaterialScience's total sales in the second quarter of 2012.
The rise in demand from emerging markets is one of the main reasons driving MaterialScience’s expansion plans for toluene diisocyanate (TDI), needed for the manufacture of flexible polyurethane foam, along with its commitments to expand in the isocyanates and polyurethanes industry.
As part of MaterialScience's TDI new capacity and restructuring project, the firm announced plans to invest €150m in a new world scale 300,000 tonne/year facility in Dormagen, Germany, which is expected to come on stream in 2014. The new unit will replace the company’s existing TDI and pilot plants on the site, which have combined capacities of 90,000 tonnes/year.
The new facility will use the new gas phase phosgenation technology, which is safer and more energy and ecologically efficient when compared with conventional TDI technology, according to the company. This new technology is already in operation at Bayer's 250,000 tonne/year TDI unit at
In MaterialScience's other business units, second-quarter results were mixed.
Second-quarter sales in the Polycarbonates business fell by 4.3% year on year to €728m. This drop was attributed to lower selling prices for granules and price declines in Asia Pacific, Europe and North America, which failed to be compensated by moderate price increases in Latin America, Africa and the
Sales over the quarter in MaterialScience's Coatings, Adhesives and Specialities business unit increased by 3.5% to €507m compared with the same period last year. Price increases in
Overall, Bayer reported a 33.9% year-on-year fall in the second-quarter 2012 net income to €494m, partly on heavy provisions. Over the same period, the company’s total sales rose by 10% to a record €10.2bn, while operating profit was down by 41.1% at €750m.
($1 = €0.82)
Additional reporting by Nurluqman Suratman, Franco Capaldo
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