Management Report

9.3 MaterialScience

Research and development

MaterialScience spent €104 million on research and development in the first half of 2013, including €47 million in the second quarter. This investment went mainly to explore new areas of application and improve process technologies and products. In addition, MaterialScience invested €50 million in the first half of 2013 in joint development projects with customers, including €26 million in the second quarter.

Capital expenditures, acquisitions and cooperations

In January 2013, we opened our first development and technology center for high-tech plastics in Yongin, South Korea. The aim of the center is to develop new applications for polycarbonates, mainly in the automotive and IT sectors, in close cooperation with Korean companies. This new facility strengthens our global network of research and development sites.

In February 2013, the regulatory permit to build and operate a major new plant at the Dormagen site became final. This will be a high-tech facility for the production of toluene diisocyanate (TDI), a precursor for flexible polyurethane foam, using a particularly eco-friendly technology. The new 300,000-tons-per-year facility is due to replace the existing TDI plants in Dormagen and Brunsbüttel in the medium term.

In May 2013, we inaugurated a regional innovation hub for Asia/Pacific in Shanghai, China. The aim of the center is to develop novel ideas for the use of high-performance plastics, foams and coatings in key sectors such as mobility, construction, IT and renewable energy. The new hub, which is located at the company’s existing Polymer Research & Development Center (PRDC), will provide support to other innovation facilities across the region.

In June 2013, MaterialScience and ThyssenKrupp Uhde/Uhdenora announced the worldwide commercial launch of their jointly developed oxygen-depolarized cathode (ODC) technology. The new process reduces the very high energy consumption in chlorine production by up to 30% compared with the current standard process. The element is a primary base material in the chemical industry. Its uses include plastics, medicines and crop protection products.

Emerging Markets

In the Emerging Markets, MaterialScience had sales of €2,377 million in the first half of 2013 (H1 2012: €2,410 million). Business held steady year on year (-0.6%) after adjusting for currency effects. Second-quarter sales in these countries declined by 3.1% (Fx adj.) to €1,218 million (Q2 2012: €1,263 million). This was due to an overall drop in sales in the Emerging Markets of Asia despite a further increase in China. Sales in Latin America were at the level of the prior-year quarter, while there was a slight increase in Eastern Europe. The Emerging Markets’ share of total MaterialScience sales was 42.1% in the first half of 2013 (H1 2012: 42.0%) and 42.4% in the second quarter of 2013 (Q2 2012: 42.8%).

Last updated: July 31, 2013  Copyright © Bayer AG