<div><em>Bayer AG on Tuesday “legally and economically” separated material science business into a new unit named Covestro AG, reports<strong> C H Unnikrishnan</strong></em><br><br><br>Covestro, the rechristened material science (industrial chemicals and solutions) business unit of German life sciences-to-chemicals multinational Bayer AG, plans to sharpen its focus on the key emerging markets including India after having been carved out as an independent entity. The industry chemicals maker with key focus on automotive, construction and electronics sectors, may also make additional investments in these markets both for product development and manufacturing. </div><div> </div><div>"With the freedom and bold business direction of the new independent entity, we look forward to building a successful future for Covestro in India as it is the case with all our key markets," said Ajay Dhuranni, managing director, Covestro India Pvt Ltd, in an interview with BW Businessworld on Wednesday.</div><div> </div><div>As on today, we have built enough capacity in our existing manufacturing plants in India and the imports from the group's facilities in China are also sufficient to meet the current demand in the local market. But, in case the market expands with additional requirements in terms of technology and products, we can always think about new investments, Dhurani said. </div><div> </div><div>A year ago, Bayer had said that it wanted to focus entirely on the life science businesses – HealthCare and CropScience – and float MaterialScience on the stock market as a separate company. In this way Bayer is positioning itself as a world-leading company in the field of human, animal and plant health. Bayer’s board of directors had unanimously approved this decision.</div><div> </div><div>Bayer chief executive had in September 2014 said that the group’s intention is to create two top global corporations: Bayer as a world-class innovation company in the life science businesses, and material science unit as a leading player in its own segment.</div><div> </div><div>“Both these companies have excellent prospects for success in their respective industries. Employment levels are expected to remain stable over the next few years, both globally and in Germany, said Bayer CEO Marijn Dekkers announced last year.</div><div> </div><div>In recent years, Bayer has been focusing mainly on its life sciences activities with the launch of several novel pharmaceutical products. It had also had acquired the over-the-counter products business of US drug maker Merck & Co., Inc the same year. The group was also concentrating on successful development of the CropScience business. The life sciences business is currently account for about 70 per cent of Bayer's sales.</div><div> </div><div>Covestro will come out wth an initial public offer (IPO) and will be listed in Europe as a separate company in the next couple of months. Post the IPO, Bayer will eventually exit from this company as several private equity players have already shown interest in buying out the business. </div><div> </div><div>A key reason for the spin off and the IPO is to give Covestro direct access to capital for its future development as its access to funds from Bayer cold be constrained due to the group’s substantial investment needs of the life science businesses for both organic and external growth. But, as a separate company, Covestro can now align its organizational structures and strategic decisions faster in line with its specific industrial environment and business model.</div><div> </div><div>Covestro, as a separate entity in the space of industry chemicals and solutions, is currently Europe's fourth-largest and it had global sales of around EUR 11.7 billion in 2014. The company has a an employee strength of at least 17000 globally.</div><div> </div><div>Ranked among the top five chemical companies in India, Covestro has some 300 people in its workforce and it owns three factories located at Ankleshwar in Gujarat, Noida in UP and Cuddalore in Tamil Nadu. Recently, the company had doubled its TPU (thermoplastic polyurethanes) manufacturing capacity in Cuddalore. </div><div> </div><div>--</div>
