2. Strategies of the Segments
At Pharmaceuticals, our largest division in terms of sales, we focus on researching, developing and marketing innovative medicines with a positive cost-benefit ratio primarily in the therapeutic areas of cardiology, oncology, gynecology, hematology and ophthalmology. In this way, we are addressing the growing requirements of patients, physicians, health care payers and regulatory agencies.
As part of the Bayer Group’s reorganization, we have dissolved the Medical Care Division and integrated the Radiology business unit into our Pharmaceuticals Division.
To achieve our medium-term growth targets, we are continuing to rely on marketing our recently launched products Xarelto™, Eylea™, Stivarga™, Xofigo™ and Adempas™. We plan to steadily expand the indications for these medicines through comprehensive study programs – some of them in collaboration with other pharmaceutical companies – and thus make them available to further patient groups.
To safeguard long-term growth, we will further increase our investment in research and development. Besides expanding early research, we are concentrating on the clinical development of active drug substance candidates in the therapeutic areas of cardiology, oncology, hematology and gynecology. In addition, we are selectively expanding and supplementing our development portfolio through licensing agreements and acquisitions.
To improve access to our products in developing and emerging countries (Access to Medicine), we augment our philanthropic activities (see Chapter 11 for more information) with economically feasible concepts.
Online annex: 3-2-1:limited assurance
As an innovation company, we aim to address current challenges in order to improve people’s quality of life in the areas of disease prevention and therapy. Within the scope of our entrepreneurial possibilities in a dynamic market environment, we seek to make a responsible contribution for the benefit of society. Through our Access to Medicine (ATM) activities, we aim to enable access to our products for certain patients, aligning these efforts to our company’s expertise and our specific product portfolio. Here we distinguish between not-for-profit and economically feasible activities. The former include our efforts in respect of neglected tropical diseases (NTDs). In this connection, we provide the WHO free of charge with two of our active ingredients to treat African sleeping sickness and Chagas disease. Other activities in this area are our education programs and the development of products to treat NTDs.
Our family planning programs are economically feasible and facilitate improved access to hormonal contraceptives for women in developing countries. These programs, which are anchored in our business strategy, provide international development partners with our products at preferential prices.
In some countries, where sections of the population have no access to innovative medicines via health care systems, we have established patient assistance programs for selected products. These aim particularly to provide access to oncology and cardiovascular products and products to treat chronic diseases such as multiple sclerosis and hemophilia. Such programs exist in, for example, the United States and China as well as a number of countries in South and Southeast Asia and Southeastern Europe.
As part of the Bayer Group’s reorganization, the Consumer Care Division will be renamed Consumer Health. The strategy of the new Consumer Health Division is aimed at building on our strong position in the market for over-the-counter (OTC OTC At Bayer, OTC (over-the-counter) medicines are those obtainable without a prescription. In finance, OTC represents trade between financial market participants outside of an organized exchange. OTC transactions are nevertheless subject to securities trading laws. ) products, nutritional supplements and other self-care products in selected consumer health categories.
We aim to strengthen our established brands, such as Aspirin™, Aleve™, Bepanthen™, Berocca™, Canesten™, Claritin™, Coppertone™, Dr. Scholl’s™, Elevit™, MiraLAX™ and Supradyn™, by driving organic growth through product innovation and geographical expansion. We are also seeking to expand our position in important markets such as the United States, Brazil, Russia and China.
Alongside the ongoing integration of the consumer care businesses acquired in 2014 from Merck & Co., Inc., United States, and Dihon Pharmaceutical Group Co. Ltd., China, we continue to pursue external growth opportunities arising from the progressive global consolidation of the OTC industry. In this way, we aim to further expand in selected categories and markets where it makes strategic sense to do so and can contribute to increasing Bayer’s enterprise value.
We are aligning our Crop Science business to the long-term trends of the agricultural markets, from which we have derived three focuses for our strategy:
- Improvement in agricultural sustainability – in other words the most responsible possible deployment of our resources
- Increase in agricultural productivity through innovation – in other words higher crop yields and quality
- Full leveraging of digitization opportunities to help farmers make the right decisions and to make product applications even safer
Our aim is to help shape the future of the agricultural industry with innovative offerings that increase its productivity, thus generating profitable and sustainable growth for Crop Science and our customers and enabling the production of sufficient food, animal feed and renewable raw materials for a growing world population despite the limited amount of available arable land. Crop Science’s strategy is built on four key elements:
- Enhancing the Crop Protection and Environmental Science portfolio
- Expanding the Seeds business
- Increasing customer centricity along the entire value chain
- Leading the way in innovation
We aim to enhance our Crop Protection and Environmental Science portfolios by adding new and improved products, concentrating on core brands and offering integrated solutions in major crops. Support for this endeavor is provided by our innovative technology platform for both chemical and biological crop protection. We are continuously investing in the expansion of our production capacities to meet rising demand for our products.
We continue to work on the expansion of our Seeds business. We plan to further strengthen our positions in our established crops – cotton, oilseed rape / canola, rice and vegetables – and to establish competitive positions in soybeans and wheat. We intend to gain long-term access to high-quality breeding material through acquisitions, in-licensing and partnerships and to steadily expand our existing breeding expertise.
Another major part of our strategy is to strengthen customer centricity along the entire value chain and continuously optimize distribution. We are steadily expanding our successful food chain partnerships. In these projects, Crop Science works with all participants in the food chain to safeguard and increase yields, and to improve the quality of harvested produce. With the Bayer Forward Farming initiative, Crop Science cooperates with farmers to demonstrate innovative crop solutions and services for sustainable agriculture to interested stakeholders. Crop Science will also increasingly concentrate on developing solutions especially tailored to help smallholder farmers increase their profitability while ensuring environmentally friendly cultivation, thus lastingly improving their standard of living.
To lead the way in innovation and develop holistic solutions, we aim to build on our expertise in the integration of seed technology with chemical and biological crop protection and to support our customers with new and improved solutions. New areas of innovation, such as digitization in agriculture, account for another major part of this. We intend to support this development in the future by making use of proprietary digital platforms and data models that can enable us to give farmers special agronomic recommendations. The aim here is to make agriculture more sustainable.
Our Animal Health business aims to strengthen its position in the already heavily consolidated market for veterinary medicines. Here we rely on organic growth through the expansion of our R&D activities and the increased use of our existing distribution channels, particularly specialist retail chains. We also intend to strengthen our position with targeted in-licensing and acquisitions.
Covestro helps to address global challenges
As a global supplier of high-tech polymer materials and application solutions for many areas of modern life, Covestro aims to generate profitable growth in the long term. Over the coming five years, the company aims to build on its leading positions in its industry sectors and participate in the growth that experts are predicting for its customer industries. Covestro supplies key industry sectors worldwide such as the automotive, construction and electronics industries. It develops and manufactures components for polyurethane foams, the high-tech plastic polycarbonate and raw materials for coatings, adhesives and sealants, as well as specialty products such as films and elastomers.
Growth impetus is expected to come from macro trends such as climate change, the diminishing availability of fossil resources, the expanding global population, urbanization and increasing mobility. Through its products, Covestro aims to help master these challenges in line with its vision “To make the world a brighter place.” In keeping with this, the company’s activities are embedded in a comprehensive sustainability strategy.
Covestro’s large-scale facilities around the world have been extended and are capable of serving the anticipated growth in demand. Therefore, the company does not predict any greater need for expansion in the foreseeable future.
At the same time, Covestro intends to further optimize its network of sites and its cost structures. To this end, the company has initiated a structured profitability program.
Covestro is focusing on continuous product and process innovation as a means of safeguarding and building its competitive position in the global marketplace. Research and development is steered by targets aligned to the needs of the company’s customer industries.
The Polyurethanes (PUR) business unit intends to further expand its strong position as an integrated raw material and systems supplier, mainly for rigid and flexible foams. While flexible foam ensures added comfort in everyday life through its use in products such as mattresses and upholstery, rigid foam serves above all as an insulating material for buildings and refrigerated appliances, and thus helps to lower energy consumption and greenhouse gas emissions.
In the automotive, electronics and construction sectors, in particular, rising demand is anticipated for polycarbonate, an engineering thermoplastic characterized by positive properties such as low weight, transparency, stability and design flexibility. The Polycarbonates (PCS) business unit aims to further strengthen its technological leadership and is focusing on, for example, polycarbonate-based composite materials as a low-cost substitute for solutions based on glass and metal.
The Coatings, Adhesives, Specialties (CAS) business unit develops and manufactures mainly polyurethane-based raw materials primarily for coatings and adhesives. The main areas of application are automotive and transportation, infrastructure and construction, wood processing and furniture. The business unit aims to secure and build its position in its core business and to achieve accelerated growth in specialties.