despite a challenging market environment globally, covestro global sales increased by 2.7% in fiscal year 2015, and net income soared by an impressive 54.3% in the first half of 2016. “covestro’s customers, investors and other stakeholders are greatly satisfied with our business performance. to date, covestro’s share price has approximately doubled, compared with the issue price at 24 euro per share.” said patrick thomas, covestro global ceo and chairman of the board of management.
the substantial growth in the china market contributed significantly to covestro’s overall growth, accounting for 16% of global sales in fy 2015 and core sales volumes growing by 14% in the first half of 2016. in the first year of independence, covestro’s footprints of continuous development in the china market are as follows.
offer value-add solutions to unleash growth potential
as china’s economy transitions, key industries such as construction and automotive face slower growth. in 2015, total output of the construction sector grew only 2.3%, and the automotive industry saw only 3.25% of growth. against this backdrop, the industry’s focus has shifted from capturing fast growth to creating value-add solutions that focus on sustainability, innovation and efficiency.
to adjust to this evolving market, covestro has taken a number of steps to inspire value-add solutions that unleash growth potential. for the construction sector, covestro established the covestro-tongji eco-construction & material academy, which is designed to promote the concept and knowledge of eco-buildings, while advancing the research and development of green construction materials and enhancing the chinese public’s awareness of environmental protection and energy efficiency. in the automotive sector, covestro works with the automobile coatings association of ciesc (aca) to build an innovative knowledge sharing platform — the covestro south china joint lab, which helps local coating makers connect with the latest coating technology to shorten the lead time to market for new products. these innovative platforms provide customers and partners with the solutions and expertise they need to continue achieving business growth.
focus on sustainability for the benefit of people, planet and profit
sustainability is becoming an increasingly important priority. in recent decades, accelerated urbanization, increasing mobility needs, changing demographics and extensive industrial development have created a heavy burden on the chinese environment and ecosystem. china sees sustainability emerging as one of the priority topics that can usher the country through its current transition period.
covestro’s global mission is to make the world a brighter place, delivering products and processes that improve people’s lives, help conserve the planet, and move the company’s business forward. covestro aims to decrease energy consumption by 50% by 2025 and halve co2 emission by 2030. in china, these ambitious sustainability goals, coupled with continuous efforts, have facilitated covestro in winning numerous awards on the sustainability front.
in addition, covestro is also working to create innovative business solutions that are inspired by sustainable-thinking. for example, at covestro’s new factory in dormagen, germany, co2 is being used as a raw material in the industrial production of polyols, which largely reduce the facility’s carbon footprint while provide the industry with an alternative source of carbon. covestro has made a pledge to dedicate 80% of its research and development expenditures to developing sustainability solutions through to 2025.
releasing the power of local innovation to lead in global
local innovation is becoming essential for any successful business in china. in the past two decades, multinationals have worked to establish more local innovation capabilities, evolving their innovation operations from low-cost support to global operations to integrated efforts that adapt technologies to local-market demands, and to strategic deployment that position china as a hub for global innovation network. at covestro, we have entered the latest stage, proactively leveraging china-based innovations to explore growth opportunities in china and around the around.
in china’s booming wind energy sector, for example, the needs for increasing power efficiency and lower power generation costs have become increasingly critical. according to data from the global wind energy council, in 2015 the newly installed capacity of china’s wind energy occupied 48.4% of the globally newly installed capacity.
to meet this market demand, covestro’s wind project team in asia pacific collaborated with several leading manufacturers in industries such as wind turbine blades, fiberglass and infusion processes to form a collaborative industry value-chain for the application and innovation of polyurethane for wind turbine blades. as a result of this program, the world’s first 1.5mw high-performance polyurethane resin wind blade was successfully produced in china. the polyurethane resin can be made into thinner and longer wind blades, creating higher power efficiency while lowering generation costs.
covestro is also releasing the power of local innovation through insqin®, an innovative turnkey solution for a new generation of polyurethane (pu) coated fabrics. this innovative coating creates new forms of value chain collaboration so as to reshape material innovations and sustainable manufacturing in the in footwear and apparel manufacturing sector, where china is the largest market.
with state-of-the-art pilot-lines at dedicated lab spaces in china and germany, covestro’s global team of textile experts is working directly with brand owners and inspiring them to explore new possibilities in the design and creation of “magical” pu coated fabrics, while also supporting their sourcing and manufacturing partners through more efficient and sustainable products.
continue to optimize covestro’s world-class production facilities in terms of environment, health and safety
in addition to creating innovative solutions and products for customers in china, covestro also continues to optimize the performance of its production facilities in china by increasing the efficiency of individual facilities while maintaining the highest technological standards with respect to environment, health, safety.
at covestro’s integrated site in shanghai, for example, innovative production process technologies are being employed to reduce energy consumption by 60% a year, and co2 emissions by 60,000 tons a year. in the newly inaugurated hdi site, environmental performance has been integrated and built into the performance of the facility. the last step of the hdi production process, for example, has been optimized to cut the use of solvents by 80%, and to use 60% less energy.
covestro’s outstanding operations in china are also supported by strong operational fundamentals and an expanding business presence. covestro’s china operations have been established over the past decade through over eur 3 billion of investment. covestro integrated site shanghai (ciss) is now covestro’s largest production facility outside of germany. in july, the company launched another hdi facility in ciss, making the site one of the largest hdi production centers in the world.
“we regard china as our home market, and we remain deeply committed to this market” said steffan huber, president of covestro greater china. “china is already a place where and increasing number of our key innovation breakthroughs and partnerships take place, and we look forward to continuing to growing with the country.”
information source 1: china's national bureau of statistics
information source 2: china association of automobile manufacturers
about covestro:
with 2015 sales of eur 12.1 billion, covestro is among the world’s largest polymer companies. business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. the main segments served are the automotive, electrical and electronics, construction and the sports and leisure industries. covestro, formerly bayer materialscience, has 30 production sites around the
globe and as of the end of the second quarter of 2016 employed approximately 15,700 people (full-time equivalents).
this press release is available for download from the covestro press server at www.covestro.com.
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forward-looking statements
this press release may contain forward-looking statements based on current assumptions and forecasts made by covestro ag. various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. these factors include those discussed in covestro’s public reports which are available on the covestro website at www.covestro.com. covestro assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.