PITTSBURGH, March 28 /PRNewswire/ -- Bayer Corporation's sales increased
10 percent in 1999 to $8.9 billion, with about half the growth due to recent
acquisitions, including the December 1998 acquisition of Chiron Diagnostics,
reported Bayer Corporation President and CEO Helge H. Wehmeier at the
company's annual news briefing. Further growth and increased profits are
expected in 2000 and beyond as the company continues to integrate recently
acquired businesses and expands its aggressive investment in capital
expenditures and R&D.
"Bayer Corporation became stronger, more tightly focused, better
positioned for growth and more closely attuned to our customers' current and
future needs during 1999, thanks to acquisitions, investments and
infrastructure improvements that make us more efficient and easier to do
business with," said Wehmeier. As evidence of the growth, Wehmeier cited an
increase in sales per employee from $253,000 in 1992 to $402,000 in 1999.
During the same time period, the company saw sales increase almost $4 billion.
Growth in 2000 is expected to remain strong, and Bayer Corporation sales in
the first two months of the year have increased at a double-digit pace.
Health Care Growth
In the health care sector, which experienced an overall growth rate of
21 percent in 1999, Bayer's Pharmaceutical Division experienced a sales
increase of 16 percent, led by its blockbuster antimicrobial Cipro, which
posted $1 billion in sales in the United States, making it the first Bayer
product to reach this milestone in any single country. Sales in Bayer's
diagnostics business expanded 43 percent, boosted by the acquisition of
Chiron's diagnostics business.
Bayer's over-the-counter business grew 8 percent, more than twice the
market's rate, and Bayer is optimistic about maintaining this growth rate.
The company's Consumer Care Division's product portfolio includes the flagship
Bayer Aspirin, Alka-Seltzer products and One-A-Day multi-vitamins, as well as
other trusted brands such as Phillip's, Neo Synepherine and Midol.
Performance in the polymer chemistry sector failed to reach these
impressive levels due to negative price pressures and rising raw material
costs, although there were some exceptions, such as plastics, where sales were
up 9 percent.
Bayer, already one of the top three suppliers of isocyanates to the
polyurethanes industry, is close to completing its acquisition of the polyols
business of Lyondell. The $2.45 billion acquisition, including an equity
interest in the propylene oxide operations of Lyondell, by the Bayer Group
will strengthen Bayer's core polymers business and add several new
technologies to Bayer's portfolio.
"Without question, Lyondell Chemical Company's polyol manufacturing and
research assets will complement our long-standing leadership in isocyanates
for high-performance polyurethane resins," said Wehmeier. "Most
significantly, the acquisition will meet the market's call for suppliers who
are single sources of complete polyurethane packages."
Agriculture Business Blossoms
Bayer Corporation's agriculture business also showed strength in 1999,
where sales bucked a downward market trend to increase 11 percent.
Imidacloprid, the active ingredient in Bayer's popular Advantage flea
treatment and its successful Premise termiticide, generated strong sales.
Bayer's concentration on insecticides that treat the seeds, instead of the
entire field, is also proving to be successful with farmers as well as a
benefit to the environment.
Although early in the season, the new Bayer Advanced consumer lawn, garden
and home products, available through a joint venture with Pursell Industries,
are showing signs of good sales at home centers, hardware stores and other
major retail outlets. The first consumer product since Aspirin to prominently
display the Bayer name and logo as part of its branding, Bayer Advanced
consumer lawn, garden and home products represent a new foray for the company
into marketing products directly to the retail customer.
"This new line of retail products creates new forms of value for our
agriculture business, as does our strong-selling Advantage flea treatment for
dogs and cats," said Wehmeier.
"Our consumer lawn, garden and home products offer a great example of real
synergies created among Bayer's agricultural businesses," said Emil Lansu,
Executive Vice President and President of Bayer's Agriculture Division. "We
have taken the sophisticated technologies available to farmers through our
crop protection products and made them available at the retail level for
consumers through our Bayer Advanced products."
Bayer to Increase Investments in U.S.
Bayer's investment in capital expansion and R&D has enabled it to increase
capacity of existing plastics and biotechnology products, for example, as well
as develop new, innovative products, such as Kogenate FS, the next generation
of Bayer's genetically engineered Factor VIII for the treatment of hemophilia.
"We are committed to winning regulatory approval for Kogenate FS, another
vital pharmaceutical product in which we have invested significantly," said
Wehmeier. "We believe Bayer is on the right track in shaping its future in a
way that enables us to meet critical needs, as we believe Kogenate FS will."
Another R&D investment, the $465 million landmark Bayer Group research
alliance with Millennium Pharmaceuticals, resulted in the early delivery of
genetic targets for drug development. And in mid-December, the U.S. Food and
Drug Administration approved Bayer's Avelox antimicrobial for respiratory
infection.
"Across the board, capital investments are expanding our capacity to
manufacture the products that emerge from our research and development
activities," said Wehmeier.
Capital improvements completed in 1999 include a $500 million expansion in
the production of chlorine, bisphenol A and TDI in Baytown, Texas; a
$92 million investment in synthetic rubber production in Orange, Texas; and a
$50 million expansion of iron oxide pigment production in New Martinsville,
W.Va.
In addition to ongoing expansion at its West Haven, Conn., pharmaceutical
headquarters, the company will construct a $200 million pharmaceutical
precursor manufacturing facility in Kansas City to produce the active
ingredients for its cholesterol-reducing drug Baycol (cerivastatin) and its
respiratory antimicrobial Avelox (moxifloxacin HCl).
All told, Bayer will invest approximately $9 billion in capital
investments and R&D from 2000 through 2004. Of the $9 billion, $4 billion
will be capital expenditures while $5 billion will go to research, with
approximately 80 percent of the latter figure going to Bayer's health care
businesses.
"This investment reinforces our commitment to growth in the U.S. market,"
said Wehmeier. "By continuing to expand our production capabilities and
increase the amount of research we conduct in the United States, we are
creating tangible, beneficial results for consumers, for our
business-to-business customers, for employees, our communities and for our
parent company's investors." In 1999, Bayer Corporation made up 30 percent of
the Bayer Group sales. This number is expected to increase over the course of
Bayer's investment program.
Also in 1999, Bayer achieved its best safety performance to date. The
company's total recordable incident rate (TRIR) of 1.16 is well below the
4.2 average for the chemical and allied product industries in 1998 (the latest
figures available).
Bayer's sales for 1999 were $8.9 billion, up from $8.1 billion the prior
year. Due to one-time charges, 1999 operating income was $521 million, profit
before taxes was $234 million, and net income was $152 million. The company
invested $664 million in capital expenditures and $758 million in R&D during
the year.
Bayer Corporation is a research-based company with major businesses in
health care and life sciences and chemicals. The company had 1999 sales of
$8.9 billion and employs approximately 22,200 people. Bayer Corporation is
investing $9 billion in capital expenditures and research and development from
2000 through the year 2004. 2000 capital investment and R&D expenditures are
projected to total $1.6 billion. Bayer Corporation, with headquarters in
Pittsburgh, is a member of the worldwide Bayer Group, a $29 billion
international life sciences, polymers and specialty chemicals group based in
Leverkusen, Germany.
SOURCE Bayer Corporation
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