Bayer Highlights Strong Year;Pioneers Eco-Friendly Chlorine Production

CP 50 company celebrates third-highest earnings in the company's history.

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According to the Bayer Group, 2009 was operationally one of its strongest years. "We were successful in a difficult environment, and we are optimistic for the future," says Werner Wenning, chairman of the board of management, at a recent financial conference at the company's headquarters in Leverkusen, Germany. Earnings before interest, taxes, depreciation and amortization (EBITDA) before special items came in at EUR 6.5 billion (US$8.7 billion), the third-highest level in Bayer's history. Net cash flow climbed by 49% to a record EUR 5.4 billion. Wenning expects sales and earnings to rise in 2010.

"We came close to reaching our ambitious goal of limiting the decline in earnings against the record 2008 level to approximately 5%," explains Wenning.

Wenning also addressed the high-tech materials business in 2009. Sales of MaterialScience receded by 22.8%. This decline was due almost equally to lower selling prices and a drop in volumes. "Whereas sales throughout the world fell sharply at the beginning of 2009, business recovered markedly as the year progressed," Wenning pointed out.

After a very weak first quarter, the earnings situation at MaterialScience also improved. Contributory factors here were said to be lower raw material and energy costs and the savings resulting from the restructuring program initiated in 2007. However, EBITDA before special items for the full year was down substantially, dropping to EUR 446 million from EUR 1,088 million in the previous year.

"To safeguard our long-term growth, we are planning capital expenditures of EUR 1.4 billion. A budget of EUR 2.9 billion has again been set aside for research and development," says Wenning.

In related news, Bayer MaterialScience has signed a contract with engineering company Uhde to build a new plant for chlorine production based on common salt. The plant, which will have an annual capacity of 20,000 metric tons and be built at Chempark Krefeld-Uerdingen in Germany, is scheduled to start operating in the first half of 2011.

It will be the first time that chlorine has been produced on an industrial scale using an oxygen depolarized cathode specially developed by BMS. Electricity consumption is said to be up to 30% lower than in standard membrane technology, resulting in an indirect reduction of up to 10,000 metric tons of CO2 emissions each year.

"Our oxygen depolarized cathode is yet another example of our focus on developing new solutions for tackling climate change. It is important to us to adopt a holistic approach – and that is why we are also offering the oxygen depolarized cathode to other companies for eco-friendly chlorine production. The more CO2 emissions we can prevent across the globe, the better," says Tony Van Osselaer, a member of the BMS Board of Management.

Currently, chlorine is mainly produced using the membrane process. By feeding in gaseous oxygen, the new technology enables electrolysis to be performed at a lower voltage.
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