Leverkusen, Germany - Bayer MaterialScience, which includes the Bayer Group's polyurethanes business, has said the decision has been made to "permanently shut down certain capacities" for Polyurethanes, Coatings, Adhesives, Specialities (CAS) and Basic Chemicals by the end of the year. The decision follows volumes and selling prices "substantially below the prior-year period" in BMS's Q2 2009 results.
In the MaterialScience unit, PU materials sales reported the steepest decline, falling by 38.6 percent compared to Q2 2008, whilst the company's CAS unit reported a 29.3-percent decline in sales. For the unit as a whole, sales dropped 30 percent to Euro 1830 million ($2594 million) as demand in key industries was significantly lower than the prior-year, the statement said. Earnings for the MaterialScience unit before special items declined by 67.5 percent to Euro 121 million compared to Q2 2008.
Bayer said however that lower raw material and energy costs and a divestment gain of Euro 15 million had "a positive effect," adding that a restructuring plan launched in 2007 also resulted in cost savings for MaterialScience.
"Our high-tech materials business stabilised in the second quarter, with sales and earnings showing a marked improvement against the first three months," said Bayer chairman, Werner Wenning. He went on to say that MaterialScience had "responded extensively" to the slump in demand, commenting that considerable production capacities were temporarily shut down at an early stage.
Further structural measures are to take place depending on market developments, particularly in Polycarbonates, the statement said. "What's more, we will speed up the implementation of the restructuring programs already announced," said the Bayer ceo.
Group sales fell by 5.9 percent to Euro 8009 million compared to the same period last year and earnings before special items dropped by 6.9 percent to Euro 1765 million. Operating profit fell by 11.8 percent to Euro 1101 million compared to Q2 2008. (RD)
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